[Global IDT Insights] China Amends VAT Refund Policy Effective September 2025

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  • Last Updated on 17 September, 2025

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China VAT refund policy amendment 2025

Editorial Team – [2025] 178 taxmann.com 387 (Article)

Global IDT Insights provides a weekly snippet of tax news specifically related to Indirect Taxes from around the globe.

1. China issues amendment on VAT end-of-period retained tax refund policy

China has issued an amendment to the value-added tax (VAT) end-of-period retained tax refund policy, effective from 01-09-2025. The revised framework introduces detailed eligibility conditions, refund proportions, calculation methods, and compliance safeguards, impacting multiple industries including manufacturing, technology, real estate, and services.
The revised rules establish differentiated refund mechanisms across sectors, define precise eligibility thresholds, and prescribe strict compliance requirements to ensure accurate administration of refunds. The announcement also consolidates and repeals prior VAT refund-related regulations issued between 2019 and 2022.
The amendment introduces the following key changes:
(a) Scope of Eligibility:
  • Manufacturing, scientific research & technical services, software & IT services, and ecological/environmental management industries: eligible for monthly refund applications.
  • Real estate development and operation industry: eligible for a 60% refund of newly added retained credits, subject to thresholds (≥ Renminbi (RMB) 500,000 and six consecutive months/two quarters of positive balances).
  • Other industries: proportional refunds (60% up to RMB 100 million, 30% above RMB 100 million) after meeting six-month continuity and RMB 500,000 increase thresholds.

(b) Eligibility Conditions: Tax credit rating of A or B; no fraudulent VAT refund, false invoicing, or repeated evasion penalties in past 36 months; not availing other VAT refund/levy-upon-refund schemes post 01-04-2019, unless repaid.

(c) Calculation Methods: Refunds determined using prescribed formulas linked to input tax composition ratios derived from VAT deduction vouchers.

Exporters must first apply for VAT exemption and refund before seeking retained tax refunds.

Pending refund applications filed before 01-09-2025 will be processed under earlier rules. Businesses will need to review VAT credit accumulation, ensure proper maintenance of deduction vouchers, and verify tax credit ratings.
Source : Official News
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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied