Issued by:    Ministry of Finance, State Taxation Administration
Issue No.:    MOF & STA Announcement [2025] No. 7
Issue Date:    August 22, 2025
Effective Date:     September 1, 2025
Links:    https://fgk.chinatax.gov.cn/zcfgk/c102416/c5242450/content.html
The following key changes have been outlined by comparing the latest end-of-period VAT credit refunding policy with previous versions:
Taxpayers engaged in manufacturing, scientific research, software, and environmental protection (the “Four Key Industries”) may continue to apply monthly for a full refund of their input VAT credit; all other sectors are no longer eligible for full refunds.
Clarify the VAT credit-refund rules for real-estate development enterprises: If, compared with the VAT credit balance on March 31, 2019, the enterprise records a positive incremental credit balance at the end of each of the six consecutive months preceding the refund application, and the incremental credit balance at the end of the sixth month is no less than RMB 500,000, it may apply for a refund equal to 60% of that sixth-month incremental balance. Real-estate developers that fail to satisfy the above requirements may instead apply under the “other taxpayers” refund criteria set out below.
A unified refund rule is established for taxpayers other than those in the Four Key Industries and real-estate development enterprises (“other taxpayers”), i.e. other taxpayers are eligible for VAT refund if meeting the following 2 criteria simultaneously:
﹘Six consecutive months of positive end-of-period VAT credit prior to the refund application; and
﹘The sixth-month VAT credit balance exceeds the prior-year-end VAT credit balance by at least RMB500,000.
The refund rates are set as follows:
﹘60% on the portion of the incremental credit not exceeding RMB 100million (inclusive);
﹘30% on any portion above RMB 100 million.
Criteria for identifying taxpayers in the Four Key Industries: A taxpayer is classified as belonging to one of the four industries if the VAT-taxable sales generated from the relevant business activities listed in the National Economic Industry Classification account for more than 50 % of its total VAT-taxable sales.
Criteria for identifying taxpayers as real-estate development enterprises: A taxpayer is deemed a real-estate developer if the VAT-taxable sales and advance receipts generated from “real-estate development and operation” activities listed in the National Economic Industry Classification account for more than 50 % of its total VAT-taxable sales and advance receipts.
If a real-estate development enterprise also operates in one or more of the Four Key Industries and any one of these business lines accounts for more than 50% of its revenue, the taxpayer must file for the refund as a “real-estate development and operation enterprise”. Should its input-VAT credit position fail to meet the refund criteria for real-estate developers, it may then apply under the refund rules prescribed for other taxpayers.
The input-credit composition ratio now also includes electronic air-transport itineraries and electronic rail tickets.