The Departure Tax Refund Policy of China refers to a refund of VAT on tax-free goods purchased by overseas travelers and those from Hong Kong, Macau and Taiwan in tax-free stores when they leave Chinese mainland from the departure port.

Here is a guide to make clear the process of how they get refund.

Q: What are the conditions for overseas travelers departing China to apply for tax refunds?

A: 1. The amount of refundable items purchased by the same overseas travelers, in the same tax refund shop, on the same day must reach 500 yuan (US$71.7) or more.

2. Tax refundable items have not yet been activated or consumed.

3. The departure date is no more than 90 days from the purchase date of the tax refundable goods.

4. When leaving Chinese mainland, the purchaser must carry the refundable goods by himself/herself or consign them with their luggage.

Q: What is the currency of the tax refund? How can I get it?

A: The currency of the tax refund is renminbi.

There are three methods to receive tax refunds, including cash, bank transfer and third-party convenient payment. If the amount of the tax refund doesn't exceed 10,000 yuan, you are free to choose any of the three methods. If the amount exceeds 10,000 yuan, you may choose bank transfer or third-party convenient payment for the tax refund.

Q: How to calculate the departure tax refund?

A: It shall be calculated based on the VAT invoice amount (including VAT) of the tax-free goods; the tax refund rate is 11%.

The calculation formula is:

VAT refundable = sales invoice amount (including VAT) of the tax-free goods × tax refund rate (11%)

Actual VAT refunded = refundable VAT - service fee charged by tax refund agencies (2%)

Since April 1, 2019, the tax refund rate is 11% for goods purchased by overseas travelers subject to a 13% tax rate. For goods purchased by overseas travelers subject to a tax rate of 9%, the tax refund rate is 8%.

Q: How can overseas travelers apply for tax refunds when departing Chinese mainland?

A: Three steps: application for the refund, verification by the customs, review and refund by agencies.

Step 1: Before leaving Chinese mainland, overseas travelers who apply for a tax refund, after purchasing tax-free goods in tax-free store, can ask the tax-free stores for the Refund Application Form and VAT invoices for tax-free goods.

Step 2: At the port of departure, overseas travelers can submit their goods, the VAT invoices for tax-free goods, and a Refund Application Form to Chinese customs for verification.

Step 3: Before handling the tax refunds, tax refund agencies who receive applications from overseas travelers, must first collect the valid identity documents of the overseas travelers, and verify the following items and seek the customs' approval:

1. The information of departure tax refund is complete.

2. The information of the overseas travelers contained in the Refund Application Form is consistent with the information of the valid identity documents.

3. The Refund Application Form has been verified and signed by the customs.

4. The departure date is no more than 183 days from the latest entry date.

5. The purchase date of the tax refund goods is no more than 90 days from the departure date.

6. The Refund Application Form is consistent with the information in the management system of departure tax refund.