On April 13, 2022, Premier Li Keqiang chaired an executive meeting of the State Council. An important decision was made at this meeting to further increase policy support such as export tax rebates to promote the stable development of foreign trade.
As a policy that is inclusive, fair and in line with international rules, export tax rebates have been further deepened and implemented in this regular meeting of the State Council.
The National Council proposed three specific measures.
First, for processing trade enterprises, after the implementation of the policy of consistent tax and refund rates for export products, the unrefunded tax amount is allowed to be transferred to input tax to deduct value-added tax.
At the same time, export credit insurance compensation will be regarded as foreign exchange receipts and tax refunds will be processed.
Zhong Huiyong, associate professor at the School of Finance at Shanghai University of International Business and Economics and deputy director of the Institute of Financial Development, explained that the measure of deducting value-added tax can avoid the overlap of export tax rebates and payment of value-added tax, greatly reducing the complexity of tax payment for enterprises.
Treating export credit insurance compensation as foreign exchange collection to process tax refunds can allow companies to enjoy the benefits of the export tax rebate policy as soon as possible, enable the company’s funds to flow back faster, and enhance the company’s capital liquidity.
Secondly, accelerating the tax refund process is also an important part of this policy.
The entire process will be processed online, reducing the average tax refund processing time from 7 working days to 6 working days.
This change may seem like just shortening one day, but it is of great significance to foreign trade companies.
Shortening the tax refund time means that enterprises can obtain the dividends of national policies more quickly, and can replenish their funds in a timely manner, allowing enterprises to have more funds for production, research and development, and market expansion, so as to better respond to market changes and challenges.
Finally, improve the efficiency of customs clearance for the return of export goods, and formulate policies to facilitate cross-border e-commerce returns and exchanges.
At the same time, trustworthy enterprises will be given more convenience in customs clearance and tax refunds, while those who cheat on tax refunds will be severely punished.
Improving the efficiency of return and customs clearance of export goods and formulating cross-border e-commerce return and exchange policies can reduce the worries of foreign trade companies in exporting, allow companies to carry out foreign trade activities with more confidence, and better encourage exports.
However, while providing favorable policies to enterprises, it is also necessary to prevent some enterprises from using the policies to engage in illegal activities such as fraudulent tax refunds.
Zhong Huiyong emphasized that while promoting the development of foreign trade, we must maintain market fairness and order.
In general, the State Council’s increase in policy support such as export tax rebates is an important measure taken by the country to cope with the current complex foreign trade situation and help foreign trade companies survive the difficult period smoothly.
The implementation of these policies will help improve the flexibility of export tax rebate policies, better reduce the burden on foreign trade enterprises, promote the stable development of foreign trade, and contribute to the stable growth of our country’s economy.
