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China has updated its tax refund policy for foreign tourists, shifting from a refund-upon-departure model to a refund-upon-purchase model, the State Taxation Administration (STA) announced on Tuesday.
Under the new refund-upon-purchase policy, foreign visitors can instantly claim value-added tax (VAT) rebates at tax-free stores, enabling them to reuse the refunded amount in real time for further shopping. Previously, VAT rebates were only available for withdrawal upon departure.
The initiative was initially piloted in municipalities and provinces including Shanghai, Beijing, Guangdong, Sichuan, and Zhejiang, and now has the conditions for nationwide promotion.
The announcement noted that when overseas travelers purchase tax-refundable items at refund-upon-purchase stores and obtain credit card pre-authorization, they can collect an equal amount of tax refund on site.
When overseas travelers are leaving the country, customs will verify their identities and tax-refundable items. After the tax refund agency verifies the shopping tax refund information and confirms it is correct, it will immediately release the credit card pre-authorization guarantee and complete the departure tax refund matters, according to the announcement.
The announcement also clarifies that tax refund shops that are willing to provide refund-upon-purchase services can become shops of the kind after reaching an agreement with local tax refund agencies.