STA Interpretation: Revised Management Measures for VAT Refund on International Transport Vessels

关于《国家税务总局关于修订〈国际运输船舶增值税退税管理办法〉的公告》政策解读

Source (Chinese): STA Policy Database — 政策解读 (Goods and Services Tax Division, April 21, 2025)

English translation: Independent translation. Not an official government translation.

---

In accordance with the relevant VAT refund policies for international transport vessels (hereinafter "vessel VAT refund"), the State Taxation Administration has issued the Announcement on the Revision of the Management Measures for VAT Refund on International Transport Vessels (hereinafter the "Announcement"), clarifying matters related to vessel VAT refund registration, declaration, processing, and post-refund management, for the convenience of both enterprises and tax authorities in implementation. The interpretation is as follows:

Q1: What is the scope of application of the Announcement?

Answer: Where a transport enterprise purchases a vessel from a domestic shipbuilding enterprise and the vessel meets the conditions of the international transport vessel VAT refund policy, the enterprise shall apply for a refund in accordance with the Announcement.

Q2: How is the refund amount for vessel VAT refund determined?

Answer: The Announcement specifies that the VAT amount refunded under the vessel VAT refund policy is the tax amount stated on the special VAT invoice (fapiao) obtained by the transport enterprise for the purchase of the vessel.

Q3: How does a transport enterprise eligible for the vessel VAT refund policy complete the vessel VAT refund registration?

Answer: A transport enterprise eligible for the vessel VAT refund policy shall, at the time of its first vessel VAT refund declaration, complete the vessel VAT refund registration with the competent tax authority by submitting the following materials: First, a truthfully and completely filled-out Export Tax Refund/Exemption Registration Form together with its electronic data. Second, copies of the documentary proof that the transport enterprise is engaged in international transport or Hong Kong/Macau/Taiwan transport operations. To facilitate enterprises, the Announcement specifies that the above materials may be submitted electronically.

Q4: When filling out the Export Tax Refund/Exemption Registration Form for vessel VAT refund registration, what should the transport enterprise pay attention to?

Answer: When filling out the Export Tax Refund/Exemption Registration Form, the transport enterprise eligible for the vessel VAT refund policy shall: enter "Yes" in the "Whether providing zero-rated taxable services" field; enter "01 (International Transport Services)" in the "Zero-rated taxable service code" field; and enter "Vessel VAT Refund Transport Enterprise" in the "Export tax refund/exemption management type" field.

Q5: If a transport enterprise that has completed vessel VAT refund registration ceases to engage in international transport operations, does it need to process a registration change with the tax authority? How should this be done?

Answer: Yes, a registration change is required. Where a transport enterprise that has completed vessel VAT refund registration experiences a change in vessel ownership, a change in port of registry, or ceases to engage in international transport (or Hong Kong/Macau/Taiwan transport) operations, and consequently no longer meets the conditions of the vessel VAT refund policy, the enterprise shall, within 30 days from the date the change occurs, submit the relevant materials to the competent tax authority to process the registration change. From the date of the change in conditions, the transport enterprise shall cease to be eligible for the vessel VAT refund policy.

Q6: How should a transport enterprise eligible for the vessel VAT refund policy declare and process the vessel VAT refund?

Answer: When applying to the competent tax authority for a vessel VAT refund, the transport enterprise shall provide the following materials and information: First, a copy of the Certificate of Vessel Ownership Registration issued by the vessel registration authority, showing the port of registry information. Second, copies of the documentary proof that the transport enterprise and the purchased vessel are engaged in international transport and Hong Kong/Macau/Taiwan transport operations. Third, the Declaration Form for Refund of Tax on Purchased Self-Use Goods together with its electronic information, with "CBTS" entered in the business type field and "Vessel VAT Refund" entered in the remarks field. Fourth, the special VAT invoice issued by the domestic shipbuilding enterprise together with its electronic information; the invoice must have been confirmed through the Integrated VAT Invoice Service Platform or the Electronic Invoice Service Platform with its purpose designated as "For export tax refund." To facilitate enterprises, the Announcement specifies that the above materials may be submitted electronically. For the first two items, if the enterprise has previously provided them to the competent tax authority and there have been no changes, the enterprise need not provide them again.

Q7: Where a vessel for which a VAT refund has been processed experiences a change in vessel ownership, a change in port of registry, or cessation of international transport (or Hong Kong/Macau/Taiwan transport) operations, and no longer meets the vessel VAT refund policy conditions, must the transport enterprise repay the refunded tax?

Answer: Yes, repayment is required. Under the Announcement, where a vessel for which a VAT refund has been processed experiences a change in vessel ownership, a change in port of registry, or cessation of international transport (or Hong Kong/Macau/Taiwan transport) operations, and no longer meets the vessel VAT refund policy conditions, the transport enterprise shall repay the refunded tax to the competent tax authority during the tax filing period of the month following the change in conditions. The amount of tax to be repaid shall be calculated using the following formula:

Tax to be repaid = Tax amount stated on the special VAT invoice for the purchased vessel x (Net value / Original value)

Net value = Original value - Accumulated depreciation

Q8: How should a transport enterprise that commits fraudulent vessel VAT refund or other illegal or non-compliant acts be dealt with?

Answer: Where a transport enterprise commits fraud in obtaining a vessel VAT refund, the competent tax authority shall recover the refunded tax and handle the matter in accordance with the relevant provisions of the Law of the People's Republic of China on the Administration of Tax Collection.

Q9: The Announcement takes effect from the date of promulgation. Can a transport enterprise that purchased a vessel meeting the vessel VAT refund policy conditions before the Announcement was promulgated, but has not yet declared and processed the refund, apply for a refund under this Announcement?

Answer: Yes. Where a transport enterprise has purchased a vessel before the promulgation of the Announcement that meets the conditions of the vessel VAT refund policy but has not yet declared and processed the refund, the vessel VAT refund shall be processed in accordance with this Announcement.