The traditional tax refund system for tourists in China
What is it?
When tourists come to China and buy specific tax refundable products at tax refund shops, they may claim a VAT refund for those products before leaving the country.
This system had been implemented for the first time in China in 2011 on a trial basis in Hainan. In 2015, it has been extended to the whole nation.
Who is eligible?
According to the State Taxation Administration of the PRC, “Foreigners and compatriots from Hong Kong, Macao and Taiwan who have been in China for no more than 183 consecutive days before their date of departure may claim the refund.”
- The goods have to figure on the list of tax refundable items;
- One person has to spend at least 500 yuan in the same tax refund shop on the same day;
- The goods have not been “activated and consumed”;
- The purchase has to be made no more than 90 days before the departure;
- On departure, the person has to carry the items by himself/herself or transported along with the luggage.
You will find more information on the official website of the State Taxation Administration of the PRC.
- Departure tax refund application form for overseas tourists (available at the tax refund shops)
- Valid ID
- VAT invoices
- The purchased tax refundable goods, if the refund claim is done at an airport
If approved, the refund can be received either by cash or by bank transfer. However, in Beijing, the refunds can now also be made through Alipay and WeChat.
Chinese tourists abroad already use a digital tax refund system on Alipay and WeChat since 2015
What are Alipay and WeChat?
Owned by the giant Tencent and with over 1.13 billion monthly active users in the second quarter of 2019, WeChat is the most popular social media in China. It has now grown to an all-round app covering almost everything from messaging and mobile payment to flight booking.
Alipay is owned by The Alibaba Group and has now 1 billion users, according to the official website. It is a mobile and online payment platform that also offers a broad range of other services like e-commerce, bike-sharing and car-hailing services.
How can Chinese tourists digitally claim VAT refunds when traveling?
In 2017, Alipay and WeChat already launched a digital tax refund system for Chinese tourists abroad. This service is now available at over 85 airports all over the world.
Before the introduction of this digital tax refund system, Chinese tourists had to line up for hours at airports to get rebates and deal with a lot of paperwork. Since 2017, everything got easier. Claiming tax rebates can be done directly through the Alipay app or the We TaxFree Pass mini-program on WeChat. The Chinese travelers just need to scan their tax refund receipts within 90 days of purchase to get an instant VAT refund in yuan on their digital wallet.
The new VAT refund system on WeChat for foreigners in China
Through the We TaxFree Pass mini-program, it is now also possible for overseas tourists in China to claim their VAT refunds online. This service is available at Beijing Capital International Airport since October 1st, 2019.
Tourists only have to search for the We TaxFree Pass program on WeChat and follow the instructions.
- The first step is to shop at eligible stores and request the Tax Free form. For now, only 14 stores in Beijing are eligible.
- Then, when leaving China within 90 days after the purchase, the traveler has to go to an eligible customs approval point. Currently, there are only 2 of them at Beijing Capital International Airport: terminal 2 and terminal 3.
- Afterward, the completed and approved Tax Free form has to be returned to agency points. The only ones available for now are at the same terminals as the customs approval points.
- Finally, the traveler presents the QR code provided by the We TaxFree mini-program to the agency counter and can instantly get the refund on his/her WeChat Wallet. Other refund payment methods through WeChat’s digital tax refund system include cash (for amounts of less then 10,000RMB) and bank transfer (if the amount exceeds 10,000RMB, this is the only option).