China Rules Exchange Collection for Export Tax Refund/Exemption SATC Announcement No.30, 2013

To ensure the authenticity of export business and prevent fraudulence regarding export tax refund/exemption, as per State Council's Notice of Plain Telegram [1995] No.3 and State Administration of Foreign Exchange's Announcement No.1 of 2012, the State Administration of Taxation of China (SATC) hereby clarifies the matters with foreign exchange collection by exporters declaring for export tax refund/exemption:

1. The exporters declaring for export tax refund/exemption must collect foreign exchange receipts (or RMB receipts for RMB settlement for cross-border trade) within the deadline of the refund/exemption declaring period and submit the documents concerning the exchange collection.

Where the exporters fail to collect the exchange receipts within the deadline, except the circumstances listed in the Article 5 herein, the value-added tax exemption policies may be applied to the export goods involved.

2. As regards the exporters under the circumstances below, they shall provide the Form of Declaration for Exchange Collection for Export Goods (Annex 1) concerning the exchange already collected, along with bank's exchange settlement memo; regarding the export goods without collected exchange, the manufacturers may temporarily avoid the calculation of tax refund/exemption/deduction until their exchange collection and completion of the Declaration for Exchange Collection for Export Goods:

(1) The enterprises under Classes B or C identified by the foreign exchange administrations;

(2) The enterprises under key monitoring identified by the foreign exchange administrations;

(3) The enterprises under key supervision identified by the People's Bank of China;

(4) The enterprises under Classes C or D identified by China Customs;

(5) The enterprises under Rating D identified by the taxation authorities;

(6) The enterprises under administrative penalty by the taxation authorities;

(7) The enterprises under administrative penalty by the customs, foreign exchange administrations, People's Bank of China, and commerce administrations;

(8) The enterprises declaring false causes for inability to collect exchange;

(9) The enterprises providing false proofs for exchange collection.

The items (1)-(5) shall use the implementation period of from the date of notice by taxation authorities till the end of the circumstances concerned; the items (6)-(9) shall use the implementation period of not more than 24 months from the date of notice by taxation authorities; where the exporters are under all of the circumstances aforesaid, the implementation deadline shall be the latest deadline in all those circumstances.

3. As of May 1, 2014, where the exporters have a less-than-70% collection rate for previous year, the Article 2 regulations herein shall govern the tax refund/exemption declared by them for each May to next April.

4. The exporters rather than those listed in Articles 2 and 3 herein may provide no proof for the exchange collection, except the regulation by the clause under-mentioned in this Article.

Where the taxation authorities need to further verify the exporters' exporting business, the exporters shall, after being informed of the verification, provide the Checklist for Export Business, the Declaration for Exchange Collection for Export Goods or the Declaration for Inability to Collect Exchange for Export Goods (Annex 2); the taxation authorities shall conduct relevant export-tax refund/exemption after verifying the accuracy of the Checklists and Declarations.

5. As regards the inability to collect exchange within prescribed time owing to the causes listed in Annex 3 herein, the exporters shall, as required, submit the Declaration for Inability to Collect Exchange for Export Goods to the taxation authorities, along with the proofs for the causes in Annex 3; the taxation authorities may treat them as the those who have collected exchange.

6. Where the collection deadline as per contract is after the deadline of the declaring period, the exporters shall provide collection proofs within the VAT declaring period of the next month after the contracted deadline; where no collection proof is available, the VAT exemption policies may be applied to the export goods involved.

7. As regards the export goods under VAT exemption, the exporters shall declare for tax exemption within prescribed VAT declaring period; where the exporters have declared previously, they shall offset previously declared data and make adjustment as per current accounting rules; where they fail to offset as aforesaid, the taxation authorities shall impose relevant penalty as per China law.

8. Where the exchange collection documents are under the following circumstances, the export goods shall be subjected to VAT policies and other penalty:

(1) False proofs or causes for the inability to collect exchange;

(2) False proofs for the exchange collected.

9. Where any suspicion is found in the exchange collection, the taxation authorities may suspend or withhold the tax refund/exemption, or require the exporters to provide certain guarantee, until the suspicions are eliminated.

10. Province-level taxation authorities shall set up corresponding evaluation indicators and warning values on the goods and fund flows of the exporters for the purpose of detecting any exchange abnormity and violation.

11. The export goods herein exclude those export goods by barter trade, commission, and frontier petty trade listed in the items (2) and (3), Article 1 of Ministry of Finance Notice of CaiShui [2012] No.39 regarding export VAT and consumption tax;

The exporters herein exclude the enterprises that are commissioned to export.

12. This Announcement shall enter into force on August 1, 2013.

Annex 1: Form of Declaration for Exchange Collection for Export Goods (omitted);
Annex 2: Form of Declaration for Inability to Collect Exchange for Export Goods (omitted);
Annex 3: Causes and Proofs for Inability to Collect Exchange for Export Good (omitted)



The State Administration of Taxation of China (SATC)
June 9, 2013