(i) Departure Tax Refund Policy

Overseas visitors can be refunded value-added tax (VAT) for the tax-refundable goods they purchase at tax-free stores when they leave China from ports of departure.

Overseas visitors refer to foreigners and compatriots from Hong Kong, Macau and Taiwan of China who reside in China's mainland for no more than 183 consecutive days before the date of departure.

Ports of departure refer to ports in regions where the departure tax refund policy is implemented, which are officially open to the public and within which tax refund agencies are established, including air transport ports, water ports and land ports.

(ii) Eligible Goods

Goods eligible for personal use, purchased by overseas visitors at tax-free stores and meeting certain conditions, are eligible for VAT refund.

The following items are excluded:

• Goods prohibited and restricted for exit listed in the Catalog of Items Prohibited and Restricted from Entering and Exiting the People's Republic of China;

• VAT exempted goods sold at tax-free stores;

• Other goods as prescribed by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration.

(iii) Conditions

Visitors who apply for VAT refund shall meet all the conditions as listed below:

• The amount of tax-refundable goods, purchased by the same overseas visitor at the same tax-free store within the same day, reaches RMB 200;

• Tax-refundable goods have not yet been used or consumed;

• The departure date is no more than 90 days from date of the purchase of tax-refundable goods;

• The tax-refundable goods purchased shall be carried with the overseas visitor himself/herself, or checked as his/her luggage upon departure.

(iv) Amount of Tax Refund

• For items subject to the tax rate of 13%, the tax refund rate is 11% (including agency service fees);

• For items subject to the tax rate of 9%, the tax refund rate is 8% (including agency service fees).

(v) Process

1. Purchasing tax-refundable goods. Overseas visitors who apply for the departure tax refund after purchasing tax-refundable goods at tax-free stores shall ask for the Refund Application Form for Overseas Visitors and sales invoices from the tax-free stores;

2. Customs verification. Overseas visitors shall declare their purchases at the port of departure together with the Refund Application Form for Overseas Visitors, sales invoices and their valid ID to the Chinese customs for verification. The customs shall sign and seal the Form after confirming that there is no error;

Valid ID mentioned above refers to passports, Mainland Travel Permit for Hong Kong and Macau residents, Mainland Travel Permit for Taiwan residents, etc., which indicate or collect the last entry date of overseas visitors;

3. Refunding by agencies. The departure tax refund shall be processed by tax refund agencies established within the restricted zone at the port of departure. Overseas visitors shall apply for the VAT refund to the aforementioned agencies with their valid ID, the Refund Application Form for Overseas Visitors signed and sealed by the customs, and the sales invoices for the purchased goods.

(vi) The Service Platform for Departure Tax Refund

https://taxfree.mofcom.gov.cn/taxfreeEnPc/index.html

The Service Platform for Departure Tax Refund provides overseas visitors with tax refund policy promotion and interpretation, tax refund store queries, "refund-upon-purchase" refund point queries, departure tax refund agency queries, and multilingual departure tax refund guides, and shares dining, accommodation, transportation, sightseeing, shopping and entertainment service guides, allowing overseas visitors to easily obtain tax refund information.

Source: A Guide to Working and Living in China as Business Expatriates issued by the Ministry of Commerce of the People's Republic of China