The Chinese State Administration of Taxation (SAT) has given more time to exporters to make an application for a VAT refund. Enterprises that export goods from China may apply for permission to make input tax reclaims to obtain a VAT refund. An exporter can reclaim VAT in respect of all items on which VAT has been paid at the standard rate by sending in an application on a regular basis. This refund system is not available in respect of goods that are subject to a reduced VAT rate even though these may also be involved in exports. The computation of the VAT refund is complex and depends on whether the claimant is a manufacturer or a direct exporter. Non-resident taxable persons are unable to reclaim VAT.
The extension in the period during which a refund may be claimed means that relevant enterprises can still apply for VAT refunds in respect of 2013. The new deadline to make the claim is 30 June 2014. Enterprises must give a reasonable justification for why they did not keep to the original deadline.
