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Beijing Seeking VAT Refunds For Tourists This Year

by Mary Swire, Tax-News.com, Hong Kong

28 April 2015


Beijing is to introduce value-added tax refunds for foreign tourists in a bid to attract visitors, say Chinese media reports.

The city's vice mayor, Chen Hong, told reporters that the Beijing Tourism Commission is seeking the necessary approvals from the federal Government.

In January the Chinese Ministry of Finance announced that it intends to expand the VAT refund pilot, which has been trialled in Hainan since 2011.

The announcement came after confirmation from authorities in Shanghai that they were seeking permission from the Government to introduce a similar scheme. Guangzhou has also disclosed aspirations to introduce the refund scheme.

The Government has previously said that there will be changes to the arrangements, but the refund schemes will be based on the framework in Hainan. Hainan's scheme is open to non-Chinese nations and residents of Hong Kong, Macau, and Taiwan. In 2012 Hainan increased the maximum cap on the value of goods that could be refunded to CNY8,000 (USD1,300) per trip, with refunds available for a maximum of two trips each year, up from CNY5,000. The scheme's minimum age limit was also cut in 2012 to 16 from 18.

The Government is expected to introduce a lower minimum spend threshold of CNY500 (USD80), compared with Hainan's CNY800 threshold, and allow refunds on a wider range of products. Currently just 21 items are entitled to refunds in Hainan.

TAGS: Finance | VAT special schemes | tax | value added tax (VAT) | law | China | Macau | Taiwan | Hong Kong | VAT refunds

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