China Optimizes Tax Refund Policy for Overseas Tourists
The State Administration of Taxation announced that China has officially upgraded the value-added tax refund policy for overseas tourists, adjusting the " refund-upon-departure " model that has been running for many years to the "refund-upon-purchase" model. The innovative move allows eligible foreign tourists to apply for tax refunds when shopping at domestic duty-free shops, and the tax refunds arrive in real time, marking an important step in China's reform of tourism service facilitation.
The core of this policy adjustment is the time-space breakthrough of the tax refund process. Previously, foreign tourists had to apply for tax refunds at the airport upon departure, which was often discounted due to factors such as queuing time, handling fees and exchange rate fluctuations. Under the new model, when tourists shop in duty-free shops with a "VAT refund" sign, they can immediately complete the tax refund through a dedicated POS machine, and the funds are directly returned to their credit card or mobile payment account, so that the refund amount can be immediately used for subsequent consumption. This change has shortened the time limit of tax refund for a single purchase from an average of 45 minutes to less than 3 minutes, greatly improving the consumption experience.
The policy upgrade has gone through a rigorous pilot verification phase. Since 2022, Shanghai, Beijing, Guangdong, Sichuan, Zhejiang and other popular inbound tourism provinces and cities have taken the lead in piloting the "purchase and refund" model, handling more than 120,000 tax refunds in total, with an average success rate of 98.7%. The relevant person in charge of the State Administration of Taxation said that during the pilot period, the in-depth docking of the national value-added tax invoice system and the payment system of duty-free shops has been completed, and multi-language service standards and risk prevention and control mechanisms have been established, laying the technical foundation for comprehensive promotion. At present, more than 20,000 duty-free shops across the country have completed the system transformation, covering major transportation hubs and tourist business circles.
"This is not only a technology upgrade, but also a service concept innovation." NTA (National Tourism Administration) officials stressed that the New Deal by simplifying the process (the number of documents from 7 to 3), strengthening the guidance (full coverage of the multi-language tax refund guide) and other measures, the satisfaction of overseas tourists increased to 92%. Li Xuhong, vice president of the Beijing National Accounting Institute, pointed out that the policy and the Hainan Free Trade Port Island duty-free, 144-hour transit visa-free policy coordination, is expected to drive inbound tourism consumption growth of 15%-20%, helping to build an "international consumption center city".
Look around the world, the coverage of "instant tax refund" in the EU has reached 89%, and the Incheon Airport in South Korea has achieved seamless connection of "scan code tax refund and airport pick-up". Although China's new policy started late, it has realized "cornering overtaking" through digital innovation. Industry experts predict that with the application of blockchain electronic tax refund and other technologies, the future may realize the refund interoperability between cross-border e-commerce and physical retail and further consolidate China's competitiveness in the international tourism market.
This policy upgrade is not only a positive response to the requirement of "building a world-class tourism destination" in the 14th Five-Year Plan, but also shows China's determination to promote high-quality development with a high level of opening-up. With the improvement of the "digital tax rebate" ecosystem, China is welcoming global tourists with smarter services and writing a new chapter in the high-quality development of inbound tourism.
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