To further clarify and integrate VAT and consumption tax policies for export business, the Ministry of Finance and the State Taxation Administration jointly issued this Announcement. The main contents and revisions are summarized below:

1. "Export goods" and "cross-border sales of services and intangible assets" are merged into "Export Business", subject to unified VAT and consumption tax export refund policies.
2. The Announcement clearly delineates three categories of VAT treatment of Export Business: VAT refund (exemption), VAT exemption, and VAT taxation, defining the applicable scope and specific tax treatment rules for each category.
   1. VAT Refund (Exemption) Policy

• Applicable Export Business include:
  1. Exported goods: Must simultaneously satisfy four conditions: “sold to overseas entities, declared to customs and actually departed from the territory, recognized as sales in accounting, and foreign exchange collected in accordance with regulations”;
  2. Deemed Exported Goods (9 categories in total).
  3. Cross-border Sales of Services and Intangible Assets: Include services and intangible assets (10 categories in total) sold to overseas entities for consumption entirely outside the territory, international transportation services, air transportation services, and overseas repair and replacement services.
• VAT Refund (Exemption) Methods

• Tax Refund Rate: Consistent with the applicable tax rate by default, unless a special rate applies. Lower rate applies if business with different rates are not accounted separately.
• Input VAT for exemption-credit-refund and VAT instant refund/return/refund shall be accounted separately and allocated by sales ratio if unidentifiable.
  2. VAT Exemption Policy
• Applicable scope:
  1. Export Goods Eligible for VAT Exemption Policy: Include goods exported by small-scale taxpayers, software products exported through online transmission, and 16 other categories (19 items in total);
  2. Cross-border Sales of Services and Intangible Assets Eligible for VAT Exemption Policy: Include construction services for projects located overseas, overseas warehousing services, and 16 other categories (18 items in total);
  3. Others: Include export business for which the taxpayer has waived tax refund (exemption) in favor of tax exemption; and export business for which tax refund (exemption) has been filed but supporting documents were not completed within the prescribed deadline. Tax treatment: Export VAT exempt; input VAT non-deductible and non-refundable, transferred to cost.
• Tax Treatment: Exemption from VAT on the export stage, however, the relevant input VAT shall neither be deductible nor refundable, and shall be transferred to cost.
  3. VAT Taxation Policy
• Applicable Scope: Includes 11 categories of circumstances, such as goods for which export tax refund (exemption) has been canceled, fraudulent transactions or submission of fraudulent documents, "false self-operation, actual agency" transactions, direct export of purchased goods without obtaining valid and legal purchase vouchers, etc.
• Tax Treatment: The export stage shall be treated as domestic sales for VAT filing purposes, and input VAT may be deducted if eligible conditions are met.

3. Consumption Tax Policies for Export Business

• Tax Refund (Exemption): For export of consumer goods subject to consumption tax that are eligible for VAT refund (exemption) policy, consumption tax shall be exempted, and consumption tax paid in previous stages shall be refunded;
• Tax Exemption: For export of consumer goods subject to consumption tax that are eligible for VAT exemption policy, consumption tax shall be exempted, but consumption tax paid in previous stages shall not be refunded, nor shall it be allowed to offset against consumption tax payable on domestic sales;
• Taxation: For export of consumer goods subject to consumption tax that are subject to VAT taxable levy policy, consumption tax shall be paid, consumption tax paid in previous stages shall not be refunded, nor shall it be allowed to offset against consumption tax payable on domestic sales.

4. Significant Adjustments to Declaration Deadlines

• Establishment of tiered declaration deadlines (taking goods declared for export and applying for VAT Refund (Exemption) as an example):

1. Taxpayers shall apply for VAT Refund (Exemption) between the month following the date of customs declaration and April 30 of the following year, and receive foreign exchange as required; if foreign exchange is not received within this period, any refund (exemption) received must be repaid;
2. If a taxpayer fails to file for tax refund (exemption) within the aforementioned deadline, a supplementary filing may be made between April 30 of the following year and the 36-month period from the date of customs declaration for export, provided that foreign exchange collection documentation is submitted and all other supporting documents are completed.

• 36-Month Declaration Deadline Limitation: Except for specific circumstances, if a taxpayer fails to apply for tax refund (exemption) or tax exemption within 36 months (calculated by calendar days), the transaction will be treated as domestic sales. This policy changes the current provision that imposes no time limit on export refund declarations.
• Transitional Policy: Export transactions occurring on or before December 31, 2025, are not subject to the 36-month declaration deadline limitation.