New tax rebate measures to boost exports
In order to help foreign trade enterprises alleviate their difficulties, the State Administration of Taxation issued the “Announcement on Further Facilitating the Processing of Export Tax Rebates and Promoting the Stable Development of Foreign Trade” (Announcement No. 9 of 2022 of the State Administration of Taxation, hereinafter referred to as Circular 9). This article introduces Circular 9. The main content of the 8 measures. The first, second and third measures will be implemented from May 1, 2022, the fourth and fifth measures will be implemented from June 1, 2022, and the sixth, seventh and eighth measures will be implemented from June 21, 2022 effective from today.
There is a joke about export tax rebates that “a layman can’t understand it, but an expert can’t explain it”. Perhaps this article will help readers understand the provisions of Circular 9. Relevant measures include:
1. Category management of export enterprises
2. Management of record documents
3. Imported processing input tax
4. Reduce the submission of information
5. Expand the reminder service
6. Simplify the handling process
7. Simple way of handling
8. Relaxation of foreign exchange collection management
Export Enterprise Category Management
According to the Announcement on Issuing the Revised Administrative Measures for the Classification of Export Tax Refund (Exemption) Enterprises (Announcement No. 46 of 2016 of the State Administration of Taxation, hereinafter referred to as Document No. 46), the tax bureau divides export enterprises into one, two, Category 3 and Category 4, with different tax rebate review measures and tax refund time respectively, provide a green tax processing channel (special service area) for Category 1 export enterprises, and give priority to export tax rebates, and Category 2, Category 3 and Category 4 enterprises within 10 days respectively, within 15 days, within 20 days to complete the export tax rebate procedures. Article 14 of Circular 46 stipulates that export enterprises that are rated as four categories shall not be rated as other management categories within 12 months from the date of assessment.
Circular 9 has two provisions on the management of export enterprise categories:
(1) Completion time of the annual assessment
Completed within 1 month after the enterprise tax credit rating evaluation result is confirmed.
(2) Credit repair can be re-evaluated
In the event of a taxpayer’s tax credit restoration, he or she may submit a written request to the tax authority for re-assessment of the management category and is no longer bound by Article 14 of Circular 46.
Filing document management
Export enterprises are subject to the export tax rebate (exemption) policy, which needs to be certified by documents. Circular No. 9 stipulates the documents that export enterprises should record themselves for later verification by the tax bureau.
(1) What documents are prepared?
According to Circular 9, within 15 days after the taxpayer declares export tax refund (exemption), in accordance with the chronological order of declaration of export tax refund (exemption), make a catalogue of documents for recordation of export tax refund (exemption), and indicate the storage method of the documents. for verification by the tax authorities. Specifically, the following documents are included:
1. Purchase and sale contracts of export enterprises
2. Transport documents for export goods
3. Documents and agreements for customs declaration entrusted by export enterprises to other units
If the taxpayer is unable to obtain the above-mentioned documents, other materials with similar contents or functions can be used for the filing of the documents.
Enterprises are no longer required to manage the export cargo loading list as a filing document.
(2) Storage time and storage method
Unless otherwise specified, the retention period is 5 years.
Why 5 years?
Perhaps it has something to do with the provisions of the Collection and Administration Law. Paragraph 2 of Article 52 of the “Law on the Administration of Taxation” stipulates: “If the taxpayer or withholding agent fails to pay or underpays the tax due to miscalculation or other errors, the tax authority may collect the tax and overdue fines within three years; there are special in certain circumstances, the recovery period can be extended to five years.”
Taxpayers can choose paper, imaging, or digital methods to keep and keep the above-mentioned filing documents. If the paper-based method is selected, the storage location of the filing documents shall also be indicated in the catalogue of filing documents for export tax refund (exemption).
(3) Exceptions to filing documents
Circular 9 specifically stipulates that the taxpayer’s zero-rated cross-border taxable behavior shall not be subject to record-filing document management.
Cross-border taxable behaviors should refer to the taxable behaviors listed in Annex IV of Caishui  No. 36 “Regulations on the Application of VAT Zero Rate and Exemption Policies to Cross-border Taxable Behaviors”.
Import processing input tax
The export of imported processing trade is an important part of my country’s export trade. According to the data of the General Administration of Customs, in 2021, the imported processing export will be 4,820,487,570,000 yuan, accounting for 22.18% of the total export value of 2,173,476,010,000 yuan.
Different from the non-refundable process of processing with supplied materials, the processing trade enterprises with imported materials implement the method of “exemption, offsetting and refunding”. Similar to input tax transfer out.
In the specific operation, the import processing trade export enterprise first calculates the amount of tax that cannot be exempted and deducted according to the planned distribution rate (that is, the proportion of the planned import value in the planned export value), and exports all of an order to complete the processing trade. After the manuals and account books are closed, they will be written off according to the actual distribution rate. Due to the difference between the actual distribution rate and the planned distribution rate, export enterprises may calculate more “taxes not exempted and deductible” but allow enterprises to deduct the “taxes not exempted and deductible” generated thereafter.
However, after the tax rebate rate for export products is the same, there is no need to calculate the “tax that cannot be exempted and deducted”.
There is input tax transferred out and input tax transferred in.
Circular 9 stipulates that after verification and confirmation, the enterprise can adjust the input value-added tax amount to the corresponding amount. That is to say, the enterprise can deduct the input VAT that has been transferred out due to inconsistent tax rebate rates after verification and confirmation of the amount.
Taxpayers need to submit relevant materials when applying for export tax refund declaration.
(1) Handling the declaration of tax refund (exemption) for entrusted export goods
Stop submitting copies and photocopies of agency export agreements.
(2) Handling the filing and declaration of export tax refund (exemption) for financial leasing goods
Stop submitting the original financial lease contract and submit a copy of the financial lease contract instead (the copy should be marked “consistent with the original” and stamped with the corporate seal).
(3) Handling the tax-free verification and write-off of export goods processed by consignment processing
Stop submitting originals and copies of ordinary invoices for processing fees issued by processing enterprises.
(4) Apply for the issuance of the “Certificate of Agent Export Goods”
Stop submitting the original agency export agreement.
(5) Apply for the issuance of the “Certificate of Imported Goods by Agent”
Stop submitting the original processing trade manual and the original agency import agreement.
(6) Applying for the issuance of the “Certificate of Tax Exemption for Processing with Suppliers”
Stop submitting the original ordinary invoice for processing fees and the original customs declaration form for imported goods.
(7) Applying for the issuance of the “Certificate of Transfer of Exported Goods to Domestic Sales”
Stop submitting the original and photocopies of the “Certificate of Tax Paid/Not Refunded for Exported Goods”.
However, the originals of the above-mentioned documents that have been stopped from being submitted shall be properly retained by the taxpayer for future reference.
Expand reminder service
From June 1, 2022, the tax authorities will provide taxpayers with the following reminder services free of charge, and taxpayers can choose to subscribe:
Export tax refund (exemption) policy update;
The export tax rebate rate library was upgraded;
There are still export goods declaration forms that have not been used for tax refund (exemption) declaration;
The export tax refund (exemption) has been settled.
Simplify the process
Circular 9 simplifies the following procedures.
(1) Simplify the filing process for foreign trade comprehensive service enterprises
Foreign trade comprehensive service enterprises no longer need to submit the “Filing Form for Tax Refunds on Agency” (Announcement No. 35  of the State Administration of Taxation) and the risk management and control system for tax refunds on behalf of enterprises. By retaining the following materials, they can apply for tax refunds on behalf of the production enterprises.
1. The foreign trade comprehensive service contract (agreement) signed with the production enterprise;
2. The “Filling Form for the Tax Refund” of each production enterprise that entrusts the agency to handle the tax refund;
3. The construction and application of the tax refund risk management and control system and the internal risk management and control information system for foreign trade comprehensive service enterprises.
According to the “Notice on Promoting the Healthy Development of Foreign Trade Comprehensive Service Enterprises” (Shangmaohan  No. 759) issued by the Ministry of Commerce and other departments, a comprehensive service enterprise refers to a foreign trade operator who accepts the entrustment of domestic and foreign customers and legally Sign a comprehensive service contract (agreement), relying on the comprehensive service information platform to handle comprehensive service business including customs declaration and inspection, logistics, tax rebate, settlement, credit insurance, etc. and assist enterprises in financing business.
(2) On-the-spot inspection and “deficient handling”
1. First-time declaration enterprises requiring on-site inspection
Enterprises that can apply for tax refund (exemption) only after on-site inspection and approval include:
The first declaration of export tax refund by foreign trade enterprises (including the first declaration of self-operated export business tax refund by foreign trade comprehensive service enterprises);
The first declaration of export tax refund (exemption) by the production enterprise (including the first time the production enterprise entrusts a foreign trade comprehensive service enterprise to declare tax refund on an agency basis);
For the first time, a foreign trade comprehensive service enterprise declares the tax refund agency.
2. How to “handle vacancies”?
Before the tax refund (exemption) amount declared by the taxpayer does not exceed the limit, the tax refund (exemption) can be reviewed and processed in accordance with the regulations, and then an on-site inspection can be carried out.
After the taxpayer’s accumulated tax refund (exemption) amount exceeds the limit, the tax refund (exemption) will be processed after the on-site verification is passed for the part exceeding the limit.
The so-called “tolerance for vacancies” means that the tax will be refunded after the verification, or it can be refunded first without verification.
3. Limit standard of tax refundable amount
The above-mentioned accumulative tax refund (exemption) limits are as follows:
Foreign trade enterprises (including self-operated export business of foreign trade comprehensive service enterprises) 1 million yuan;
Production enterprises (including the tax rebate business entrusted by production enterprises) 2 million yuan;
Foreign trade comprehensive service enterprises that handle tax rebates are 1 million yuan.
4. “Tolerance for vacancies” improved on-site inspection
If the taxpayer has the following circumstances, the tax refund (exemption) business that has been “handled for vacancies” but has not been checked on-site, the tax authority shall first conduct on-site checking:
Apply for changing the method of tax refund (exemption);
Change the competent tax authority for export tax refund (exemption);
Withdrawal of the export tax refund (exemption) filing.
5. Recover the refunded tax
In the following two cases, the tax bureau needs to recover the refunded tax:
Where it is found through on-the-spot inspection that the taxpayer has already handled the tax refund (exemption) business, which is a situation where the tax refund (exemption) cannot be handled;
The on-site inspection cannot be carried out because the taxpayer refuses to cooperate.
(1) Electronic issuance and use of relevant certificates
For the following certificates applied by taxpayers, the tax authorities will issue electronic certificates for them:
“Certificate of Agent Export Goods”;
“Certificate of Imported Goods by Agent”;
“Certificate of Entrusted Export Goods”;
“Certificate of Domestic Sales of Exported Goods”;
“Notice of Bid Winning Certificate”;
“Certificate of Tax Exemption for Processing with Suppliers”.
When applying for tax-related matters related to export tax refund (exemption), taxpayers only need to fill in the above-mentioned electronic certificate number and other information, and do not need to submit the paper and electronic copies of the certificate separately.
(2) “Contactless” processing of export tax refund (exemption)
When a taxpayer applies for the filing of export tax refund (exemption), issuance of certificates, and tax refund (exemption) declaration and other matters, the paper form information that needs to be submitted on-site according to the current regulations can be selected through online channels, in the form of video or digital Submit the application to complete the relevant export tax refund (exemption) matters.
The original paper form materials to be submitted, as well as the imaged or digitized form materials submitted through online channels, should be properly retained by the taxpayer for future reference.
Relaxation of foreign exchange management
Collection of foreign exchange is the premise for export tax refund (exemption), and Announcement No. 9 further relaxes the requirements for collection of foreign exchange:
(1) Deemed foreign exchange collection
For export goods declared by taxpayers for tax refund (exemption), foreign exchange shall be collected before the deadline for the declaration period for export tax refund (exemption). If the foreign exchange is not collected within the prescribed time limit, but the reasons listed in the “Reason for Deemed Foreign Exchange Collection and the List of Evidence Materials” are met, the taxpayer can be deemed to have received foreign exchange by keeping the “Statement of Foreign Exchange Collection for Exported Goods” and the supporting materials.
The “Reason for Deemed Foreign Exchange Collection and the List of Evidence Materials” attached to Circular No. 9 lists 9 types of situations and evidentiary materials that can be regarded as foreign exchange collection. Export credit insurance contracts, insurance claims documents, and indemnity receipts and other materials can be regarded as foreign exchange receipts and tax refunds can be processed.
(2) Circumstances where foreign exchange collection materials must be submitted
When a taxpayer declares export tax refund (exemption), there is no need to submit foreign exchange collection materials, and it is sufficient to keep the proof materials for future reference.
However, in the following cases, taxpayers must submit foreign exchange collection materials to the tax bureau:
Taxpayers whose export tax refund (exemption) management category falls into four categories;
Filing after the deadline for the tax refund (exemption) filing period;
If the foreign exchange collection materials are false or fraudulently used, within 24 months, the foreign exchange collection materials shall be submitted when the export tax refund (exemption) is declared.
(3) Circumstances in which tax refund cannot be processed due to foreign exchange receipts
Under one of the following three circumstances, export tax refund (exemption) shall not be processed, and if it has been processed, it shall be recovered.
The export contract stipulates that the final date of all foreign exchange collection shall be after the deadline for the tax refund (exemption) declaration period, but not completed before the foreign exchange collection date agreed in the contract;
Failing to collect foreign exchange within the prescribed time limit and not complying with the provisions on deemed foreign exchange collection;
Failure to retain foreign exchange collection materials as required.
(4) Specific content of foreign exchange collection materials
The foreign exchange collection materials refer to the “Statement of Foreign Exchange Collection for Exported Goods” and the supporting materials.
Evidence materials include:
For export goods that have already received foreign exchange, the proof materials are the bank’s foreign exchange receipt voucher or the foreign exchange settlement water bill and other vouchers;
If the export goods are settled in RMB for cross-border trade, the export is entrusted and the consignee collects foreign exchange, or the tax refund is entrusted and the foreign trade comprehensive service enterprise collects foreign exchange on its behalf, the receipt certificate of RMB can be provided;
For export goods deemed to be foreign exchange receipts, the evidentiary materials shall be determined in accordance with the List of Reasons for Deemed Foreign Exchange Receipts and Evidence Materials.
(5) Change the tax refund to tax exemption
Taxpayers are indeed unable to collect foreign exchange and export goods that do not meet the provisions of deemed foreign exchange collection shall be subject to the VAT exemption policy.
(6) Change tax rebate to tax collection
If the tax authority finds that the taxpayer’s foreign exchange collection materials are false or fraudulently used, the corresponding export goods shall be subject to the VAT levy policy.
(7) Exclusion from the scope of export goods
Export goods related to foreign exchange receipts do not include deemed export goods, barter trade export goods, and border small-value trade export goods. Because I cannot receive foreign exchange or RMB.
The issue of export tax rebates is relatively complicated, and the relevant taxpayers need to study the relevant documents carefully in advance, which will help to handle tax rebates in a timely manner and reduce compliance costs.