A GUIDE TO SHANGHAI’S DEPARTURE TAX REFUND
★1. Departure tax refund policy:
When tourists from overseas and those from Hong Kong, Macau and Taiwan leave mainland China from the port of departure, they will be refunded VAT for the tax refundable goods they purchased at tax refund shops.
★2. Persons Eligible:
Foreigners and compatriots from Hong Kong, Macau and Taiwan who stay in China for a period less than 183 days before their date of departure may claim the refund.
★3. Valid identity documents:
The valid identity documents are passports indicating the last entry date of overseas visitors, Mainland Travel Permit for Hong Kong and Macau residents, Mainland Travel Permit for Taiwan residents.
★4. Goods Eligible:
Goods eligible for VAT refund are the goods purchased by overseas tourists in tax refund shops for personal use, and that are eligible for VAT refund. The following items are excluded:
(1) Goods listed in the catalog of the People’s Republic of China of Articles Prohibited and Restricted from Import & Export;
(2) VAT exempted goods sold in the tax refund shops;
(3) Other goods listed by the Ministry of Finance, the General Administration of Customs and Sate Taxation Administration.
★5. Conditions for overseas tourists to apply for tax refund:
(1) The amount of tax refundable items purchased by the same overseas tourist in the same tax refund shop on the same day reaches 500 Yuan;
(2) Tax refundable items have not yet been activated and consumed;
(3) The departure date is not more than 90 days from the purchase date of the tax refundable goods;
(4) When leaving mainland China, the purchaser must carry the purchased goods by himself/herself or consign them with luggage.
★6. Basic process:
The tax refunds require three steps: application for the refund, Customs verification, and issuance of the tax refund by agency.
(1) Overseas tourists who apply for a departure tax refund after purchasing tax refund items in tax refund shops, shall, before leaving mainland China, obtain the Refund Application Form for Overseas Visitors from the tax refund shops on the strength of their valid identity documents and VAT invoices for tax refund items (issued by the upgraded version of the VAT invoice system).
(2) Passengers at the port of departure shall submit their purchases, their valid identity documents and VAT invoices for tax refund items, and a Refund Application Form for Overseas Visitors to the Chinese Customs for verification.
(3) Tax refund agencies which receive applications for departure tax refunds from overseas tourists must, before handling the tax refunds, collect the valid identity documents of the overseas tourists, verify the following items and seek Customs approval:
A. The departure tax refund information provided is complete;
B. The information of overseas tourists contained in the Refund Application Form for Overseas Visitors is consistent with the information of the valid identity documents;
C. The Refund Application Form for Overseas Visitors has been verified and signed by Customs;
D. The departure date of overseas tourists is less than 183 days from the last entry date;
E. The purchase date of the tax refund goods is not more than 90 days from the departure date;
F. The Refund Application Form for Overseas Visitors is consistent with the Departure Tax Refund Management System.
★7. VAT refundable:
The VAT refundable shall be calculated by multiplying the VAT invoice amount (including VAT) of the tax refund items by the tax refund rate of 11%. The calculation formula is:
VAT refundable = sales invoice amount (including VAT) of the tax refund items × tax refund rate (11%).
Actual VAT refunded = VAT refundable －service fee charged by tax refund agencies on handling of tax refund (2%)
Since April 1, 2019, the tax refund rate for tax refund items has been adjusted from 11% to 11% and 8%. The items with applicable tax rate of 13%, their tax refund rate is 11%, and with applicable tax rate of 9%, the tax refund rate is 8%.
★8. Tax refund method:
The currency of the tax refund is the RMB. Tax refunds can be handled either in cash or by bank transfer. If the amount of tax refund exceeds 10,000 Yuan, tax refund agencies shall refund the tax by bank transfer.
★9. Buy & Refund Service in Shanghai:
(1) Process of Buy & Refund Service
If an eligible overseas tourist is shopping in the tax refund shops, after obtaining the Refund Application Form for Overseas Visitors, he/she can first receive cash refund in RMB which is equivalent to the Tax Refund Amount. When the tourist leaves mainland China, he/she shall first go to the Chinese Customs for verification of tax refund items, and then go for the verification of the tax refund agency.
(2) Conditions for Buy & Refund Service
In addition to complying with the relevant provisions on the current Departure tax refund policy, the following conditions shall also be met:
A. Overseas Traveler promises to leave mainland China at the departure port of Shanghai within 17 days inclusive after the Refund Application Form for Overseas Visitors is issued, the purchaser must carry the purchased goods by himself/herself or consign them with luggage.
B. The maximum amount of tax refundable items purchased by the same overseas tourist in the same Buy & Refund Service shop on the same day shall not exceed 30,000 Yuan inclusive, and the traveler shall hold a credit card (on his/her own name) for pre-authorized guarantee.