The China Glass Network reports that the State Administration of Taxation and the Ministry of Commerce have recently issued a notice stating that, starting from March 1st, if an export enterprise engages in any of the seven specified activities outlined in the right table—whether through self-operated or entrusted exports—it must not submit such business to tax authorities for tax refund (exemption) claims.
The two government agencies have clearly emphasized that if an enterprise participates in any of these prohibited activities and falsely declares tax refunds, it will face serious consequences. If the tax has already been refunded or exempted, it will be reclaimed by the tax authorities. Additionally, the enterprise may be fined one to five times the amount of the fraudulent tax. Enterprises found guilty may also have their export tax rebate privileges suspended for more than six months by provincial-level or higher tax authorities. During this suspension period, no export tax rebates or exemptions will be granted for goods exported, entrusted, or agency-exported.
Here are the specific conditions that trigger these penalties:
1. The enterprise exports goods under its own name but does not bear the risks related to product quality, foreign exchange settlement, or tax refund. This includes not being liable for quality issues with the goods (unless the contract specifies such responsibility), not being responsible for failing to settle foreign exchange on time (unless agreed upon in the contract), and not being accountable for non-refundable taxes due to errors in tax rebate declarations or documents.
2. The enterprise claims to export goods independently, but the actual export process is carried out by third parties, including other businesses, self-employed individuals, or operators outside the company’s direct control.
3. After customs inspection, the exporting enterprise or freight forwarder alters the bill of lading or shipping documents, causing discrepancies between the export declaration form and the ocean bill of lading.
4. The enterprise hands over blank export declaration forms, export collection verification forms, or other tax refund-related documents to freight forwarders, customs brokers, or agents designated by foreign importers. These documents are then used by other entities or individuals without proper contractual agreements or supporting documentation.
5. The same batch of goods is exported under both a purchase contract and an export contract (or agreement) signed by the enterprise.
6. The enterprise has not participated in the actual export activity and merely acts as a front for exports arranged by intermediaries, still claiming to be the exporter.
7. Any other violations of national regulations regarding export tax rebates.
These new rules aim to prevent tax fraud and ensure that only legitimate export activities qualify for tax refunds, reinforcing the integrity of China's export system.
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