Tax-free shopping in mainland China is now easier. In early April, the Chinese government replaced the old refund-upon-departure tax refund model for visitors with one based on refund-upon-purchase. In other words, non-mainland tourists can instantly receive a rebate when shopping at a tax refund store.
Additional incentives were introduced later that April, with the authorities slashing the minimum tax refund threshold from 500 yuan to 200 yuan, and increasing the maximum refund limit from 10,000 yuan to 20,000 yuan.
[See more: Here are China’s best travel destinations for beating the heat this summer]
On 1 July, the scheme’s coverage was further expanded when Hubei province and the city of Dalian were added to the list of places participating in the scheme, which totalled 29 as of August 2024.
While the scheme is officially intended to boost domestic consumption in China’s flagging economy, tourists also stand to benefit. Read on to find out more about the tax refund scheme, including the eligibility criteria, process to make your claim and the amount of money you could save.
Who’s eligible for the tax refund scheme?
The tax rebate program is open to all foreign visitors, and residents of Macao, Hong Kong and Taiwan, who stay in mainland China for no longer than 183 consecutive days.
[See more: China’s visa-free policy has successfully sparked a tourism surge]
To participate in the scheme, you will also need to have departed China within the stipulated period (normally within 90 days of your duty-free purchase), have a credit card under your name, and have your travel document (passport or travel permit) on hand.
Where can I buy tax-refundable goods in China?
As of 10 June, there were 5,196 tax refund stores scattered across major Chinese cities and provinces such as Beijing, Shanghai, Guangdong, Xiamen, Zhejiang and Ningbo.
The distribution of these tax-refundable stores varies from area to area, with the list being updated regularly. Expect to find these tax-free stores in major shopping precincts and airports.
[See more: Five great places for hiking in the Greater Bay Area]
You can find the current list of tax refundable shops in some of the major provinces and cities in China below:
Guangdong province: Click here
Fujian province (excluding Xiamen city): Click here
Xiamen: Click here
Hangzhou: Click here
Beijing: Click here or here for an interactive map
Shanghai: Click here
What tax-refundable goods can I purchase?
Much like regular shops, tax-free stores sell a wide variety of goods, meaning you’ll be able to purchase everything from luxury products and digital gadgets to food and cultural items. A look over the current list of duty free stores in Guangdong reveals a plethora of well-known domestic and international brands such as Xiaomi, Xinhua Bookstore, Prada, Alexander McQueen and Sony.
[See more: Going to Hong Kong with a bestie? TurboJet has a summer deal for you]
Keep in mind that you need to spend at least 200 yuan at one particular tax-free store on the same day to be eligible for the refund. The items purchased must be for personal use and remain unused when you are leaving mainland China. You are also required to have the item with you during your departure, which must take place within the designated period (normally within 90 days of the purchasing date).
What are the steps to obtaining a tourist tax refund?
Once you’ve checked your eligibility (see “who’s eligible for the tax-refund scheme?”), you’ll need to shop at a store that bears the tax-free or “refund-upon-purchase“ (即买即退) logo and purchase goods that meet the criteria (See “what tax-refundable goods can I purchase?”).
Then follow these steps:
- Apply for a refund-upon-purchase. Depending on the merchant, the application will be done either in-store or at a designated tax refund counter. Regardless, you will receive a valued-added tax (VAT) invoice and a tax refund application form, which needs to be filled in with the relevant information, including your credit card details.
- Sign the agreement and complete the credit card pre-authorisation (a pending charge), which is equivalent to the tax refund amount.
- Receive your instant tax refund via your credit card, an eligible e-wallet (e.g. Wechat Pay or Alipay) or as cash.
- Keep your tax refund goods and documents such as your application form, invoices and travel documents safe.
- Show your tax refund items and documents to customs during departure. Your details and compliance with the programme will be verified. If they check out, your pre-authorisation on your credit card will be cancelled. Otherwise, the pre-authorisation equivalent to the refunded amount will be charged.
How much money can I save via the tax refund?
The amount of money saved will depend on the cost of your item, the applicable tax rate and the service charge of the tax refund agency, which currently stands at 2 percent and is calculated based on the price of your item.
Items that have a tax rate of 13 percent will receive a tax refund 11 percent, while those with a 9 percent tax rate have an 8 percent refund rate.
[See more: This is how to get to Hengqin from Macao]
As an example, if your tax refundable item costs 10,000 yuan and has a tax rate of 13 percent, you would be entitled to a refund that is 11 percent of 10,000 yuan (i.e. 1,100 yuan). After deducting the 2 percent surcharge (i.e. 200 yuan), you would receive a final refund amount of 900 yuan.
What has the reaction to the scheme been like?
Foreign visitors interviewed by CCTV were upbeat about the scheme, with one US tourist describing the process as “very fast and easy,” as “I don’t have to wait in the long line at the airport.”
Meanwhile, a visitor from Algeria who successfully applied for a refund after spending 20,000 yuan at a local shopping mall outlined the different ways he could use the savings: “I can enjoy a good meal with it or buy more things maybe in this mall or something from Tmall (Chinese online shopping platform).”
[See more: Macao is one of the most expensive places in Asia for backpackers]
Local merchants have also been positive about the tax refund initiative. The deputy manager of Chinese drone manufacturer, DJI’s Beijing flagship store, Gao Dehui, told CCTV that the sales in “May was higher than April by around 20 percent.” He added that “over 90 percent of foreigners lodge an application for a tax refund.”
Data from China’s tax administrators is also revealing, as it shows that the tax refund applications processed from 27 April and 26 May skyrocketed by 116 percent year-on-year, following the implementation of the new incentives.
