“If you export goods worth 1 million yuan with a tax refund rate of 13%, you’ll receive a refund of 130,000 yuan. If you fail to file correctly or miss the deadline, you’ll lose that 130,000 yuan for nothing. And once the new regulations take effect in 2026, a simple oversight could mean the difference between ’no tax refund” and ”tax liability.”” This is the calculation presented to business leaders by Li Yuanhai, a Level 4 Research Officer at the Second Taxation Branch of the Hunan Provincial Taxation Bureau under the State Taxation Administration, during a special briefing on “Supporting Hunan Enterprises Going Global” held on July 30.

On January 1, 2026, the *Value-Added Tax Law of the People’s Republic of China* and its Implementing Regulations officially took effect, along with Announcement No. 11 of 2026 by the Ministry of Finance and the State Taxation Administration (Tax Refund and Exemption Policies) and Announcement No. 5 of 2026 by the State Taxation Administration (Administrative Measures for Tax Refunds and Exemptions). The new regulations have systematically reshaped the framework of the export tax rebate system—whereas in the past, failure to comply might have resulted in merely a smaller tax rebate, now failure to comply could lead to a shift from ”no tax rebate” to ”tax liability.” More critically, Announcement No. 2 of 2026 issued by the Ministry of Finance and the State Taxation Administration eliminated export tax rebates for 249 products and phased out export tax rebate rates for 22 products—including batteries—to zero, effective April 1. Combined with other adjustments, tax rebates were eliminated for a total of 271 products. This means that the tax rebate benefits previously enjoyed by a large number of export enterprises are disappearing. If companies do not promptly adjust their product selection and supply chains, they will not only fail to receive tax rebates but may also face retroactive tax payments.

The systematic overhaul of export tax rebate regulations requires companies to re-evaluate compliance across the entire process—from product selection and customs clearance to tax filing. Qicaiying Group specializes in providing domestic and international company registration services in Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, Hong Kong, the U.S., Japan, South Korea, Southeast Asia, Singapore, the British Virgin Islands (BVI), the Cayman Islands, and more. We also offer a one-stop suite of corporate services, including annual review and audit, bookkeeping and tax filing, tax compliance, information updates, bank account opening, ODI filing, FDI filing, and other corporate services; Hong Kong residency application, renewal, and permanent residency services; Singapore EP application services; and cross-border e-commerce mentoring and agency operations—all as part of our one-stop service. If you have any needs or are interested, please feel free to contact me at any time (Consultation Hotline: 18676749275, add WeChat: Qicaiyingjituan).

I. Six Key Changes to Export Tax Rebates in 2026

The new regulations are not merely minor adjustments, but a systematic overhaul of the institutional framework. Companies need to fully understand the following six major changes to avoid running into trouble.

Change 1: Institutional Integration—”One Announcement Governs the Entire System.” Announcement No. 11 of 2026 repealed previous documents such as Cai Shui [2012] No. 39 and Cai Shui [2014] No. 98, consolidating export tax rebate policies previously scattered across multiple regulations into a single announcement. The five filing forms were consolidated into a single general filing form, and all nine types of certificates were digitized, resulting in a 55% increase in filing efficiency. While this change has reduced administrative costs for enterprises, it also means that old operational practices must be updated accordingly.

Change 2: Tax rebates have been eliminated for 271 products. Announcement No. 2 of 2026 issued by the Ministry of Finance and the State Taxation Administration eliminates export tax rebates for 249 products and gradually reduces the export tax rebate rates for 22 products—including batteries—to zero, effective April 1. Companies must immediately verify whether their exported products are included in the list of those subject to the cancellation of export tax rebates and promptly adjust their product selection strategies and pricing models. For products previously priced based on costs inclusive of tax rebates, profit margins must now be recalculated.

Change 3: Expansion of the scope of application. Announcement No. 11 adjusted the scope of export tax rebates from ”exported goods and services” to ”export transactions,” expanding it to include cross-border sales of services and intangible assets. Foreign trade enterprises that export services or independently develop intangible assets may apply the tax exemption, credit, and refund system. This change is beneficial for enterprises providing cross-border technical services, software outsourcing, and design services; however, it requires these enterprises to establish a separate accounting system for service exports.

Change 4: ”36 months—no extensions.” The new regulations specify that the filing deadline for export tax rebates is 36 months; rebates cannot be processed after this deadline has passed. Companies must establish a robust system for managing tax rebate filing deadlines to avoid losing their right to a tax rebate due to delays in internal processes.

Change 5: Refinement of the tax base. The tax base for value-added tax (VAT) refunds (or exemptions) on exported goods for manufacturing enterprises is the actual free-on-board (FOB) price of the exported goods. If the export invoice does not reflect the actual FOB price, the competent tax authority has the right to determine it. This means that enterprises must ensure that the export invoice matches the actual transaction price; otherwise, the tax authority may adjust the amount based on its assessment.

Change 6: Adjustments to the scope of application for the "exemption, credit, and refund" and "exemption and refund" policies. Manufacturing enterprises that export goods produced in-house and goods deemed to be produced in-house are subject to the tax exemption, credit, and refund system; foreign trade enterprises that export goods are subject to the tax exemption and refund system. When foreign trade enterprises directly export services or intangible assets developed in-house, they are treated as manufacturing enterprises and uniformly subject to the tax exemption, credit, and refund system. Enterprises must determine which tax refund system applies based on their specific type.

II. Tax Rebates Eliminated for 271 Products: Product Selection and Supply Chain Adjustments for Cross-Border E-Commerce

The elimination of tax rebates on 271 products is one of the policy changes that will have the greatest impact on exporters in 2026. Companies need to make systematic adjustments in three areas: product selection, pricing, and supply chain management.

Product Selection Criteria. Companies should immediately download the latest export tax rebate rate database and verify the rebate status of their main products item by item. For products whose tax rebate rates have been reduced to zero, companies need to reassess their export profit margins—if profits turn negative after the tax rebate is eliminated, they should consider adjusting their product mix or seeking alternative product categories. It is particularly important to note that the phased reduction of export tax rebate rates for 22 battery products to zero, combined with the resumption of the consumption tax on lithium batteries effective September 1, constitutes a ”double blow,” with exporters in the new energy industry chain being the hardest hit.

Pricing Dimensions. In the past, many export companies set prices based on ”cost including tax rebates,” where the export price was calculated as cost minus tax rebate income plus profit. Following the elimination of tax rebates, the pricing model has shifted to export price equals cost plus profit. If companies are unable to pass on the loss from the tax rebates to overseas buyers, their profit margins will be directly squeezed. It is recommended that companies take a three-step approach: First, analyze the current profit margins of all affected products; second, calculate the new profit margins following the elimination of export tax rebates; and third, negotiate price adjustments with overseas customers or explore ways to reduce costs.

Supply Chain Dimension. For products no longer eligible for tax rebates, companies may consider reducing costs by optimizing their supply chains. For example, they can relocate certain production processes to comprehensive pilot zones to take advantage of the ”tax-free without invoices” policy, or utilize the 9810 overseas warehouse model to benefit from the ”tax refund upon departure” advance refund mechanism. At the same time, companies should monitor updates to the export tax rebate rate database to promptly capitalize on new policy opportunities.

In response to the systemic changes brought about by the new export tax rebate regulations, Qicaiying has launched a bundled service package comprising ”E-commerce Compliance Accounting + Export Tax Rebates + Bookkeeping and Tax Filing”: E-commerce Compliance Accounting involves a specialized review of the consistency between cross-border e-commerce platform transaction records and declaration data, and establishes order ledgers, purchase ledgers, inventory ledgers, and expense ledgers; The Export Tax Rebate service covers the entire process—from filing for tax rebates to submission and accounting—ensuring timely and accurate tax rebate filings; the Bookkeeping and Tax Filing service ensures logical consistency between VAT and corporate income tax filing data and export tax rebate data. Qicaiying Group specializes in providing domestic and international company registration services in Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, Hong Kong, the United States, Japan, South Korea, Southeast Asia, Singapore, the British Virgin Islands (BVI), the Cayman Islands, and other locations, as well as annual review and audit, bookkeeping and tax filing, tax compliance, information changes, bank account opening, ODI filing, FDI filing, and other corporate services; Hong Kong residency application, renewal, and permanent residency services; Singapore EP application services; and one-stop services such as cross-border e-commerce mentoring and agency operations. If you have any needs or are interested, please feel free to contact me at any time (Consultation Hotline: 18676749275, add WeChat: Qicaiyingjituan).

III. From ”No Tax Refunds” to ”Taxes Must Be Collected”: Where Is the Red Line?

The change in the new regulations that concerns businesses the most is that, whereas in the past, a lapse in attention might have resulted in only a slightly reduced tax refund, now it could lead to a shift from ”no tax refund” to ”tax liability.” What triggers this fundamental change?

Scenario 1: Exported goods do not meet the conditions for a tax refund. According to Announcement No. 11, exported goods eligible for VAT refund (or exemption) policies must meet all four of the following conditions: they must be sold to overseas entities or individuals; they must be declared to customs and have actually left the country; they must be recorded as sales in accordance with accounting regulations; and foreign exchange receipts must be collected in accordance with regulations. If an enterprise fails to collect foreign exchange proceeds in accordance with regulations (such as collecting funds through a third-party payment platform without filing the required foreign exchange receipt records), it will not be eligible for the tax refund policy. More seriously, if foreign exchange proceeds are not actually received after the goods have been declared and cleared for export, the tax authorities may deem the export transaction to be fictitious; not only will the tax refund be denied, but the goods may also be taxed as domestic sales.

Scenario 2: Apply the tax exemption policy rather than the tax refund policy. Under the ”tax-exempt without invoices” policy for cross-border e-commerce retail exports in the Comprehensive Pilot Zone, enterprises exporting goods for which they do not have valid purchase documents are eligible for VAT and consumption tax exemptions (rather than tax refunds). Tax exemption means neither paying taxes nor receiving refunds; if an enterprise mistakenly reports a tax-exempt export as a tax-refundable export, it will be required to pay the taxes retroactively.

Scenario 3: Taxation as if it were a domestic sale. If, after a company exports goods, the goods are returned due to quality issues and the company fails to complete the return procedures within the prescribed time limit, or fails to amend the original tax refund declaration in accordance with regulations after the return, the tax authorities may treat that export as a domestic sale and require the company to pay the value-added tax retroactively.

IV. Practical Measures for Enterprises: Establishing an Export Tax Rebate Compliance Management System

In light of the new regulations, companies should establish a systematic export tax rebate compliance management system in the following four areas.

First, establish a dynamic monitoring mechanism for product tax rebate rates. Assign a specific person to track updates to the export tax rebate rate database and verify the tax rebate rates for core products on a monthly basis. For products subject to tax rebate rate adjustments, promptly notify the sales and purchasing departments to adjust pricing and purchasing strategies.

Second, standardize the management of foreign exchange receipts. Ensure that foreign exchange is collected in accordance with regulations for each export transaction and that complete documentation of foreign exchange receipts is retained. For foreign exchange received through a third-party collection platform, the receipt must be filed as required. The amount of foreign exchange received must reasonably correspond to the export value; if there is a significant discrepancy, supporting documentation must be prepared.

Third, improve document management. Documents such as export customs declarations, special VAT invoices, export invoices, foreign exchange receipt certificates, and sales contracts must be retained in their entirety and filed by declaration batch. The product names, quantities, and amounts listed on these documents must be logically consistent.

Fourth, establish a timeline for tax refund claims. Set up a countdown reminder for tax refund filings to ensure that tax refund filings for each export transaction are completed within the 36-month deadline. If, for special reasons, a filing cannot be submitted on time, the situation should be explained to the tax authorities in advance.

The new regulations on export tax rebates mark the transition of China’s export tax rebate system from ”extensive management” to an era of ”refined management.” Only by establishing a systematic compliance management system can enterprises operate steadily under the new policy environment. Qicaiying Group specializes in providing domestic and international company registration services in Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, Hong Kong, the United States, Japan, South Korea, Southeast Asia, Singapore, the British Virgin Islands (BVI), the Cayman Islands, and other locations, as well as annual review audits, bookkeeping and tax filing, tax compliance, information updates, bank account opening, ODI filing, FDI filing, and other corporate services; Hong Kong residency application, renewal, and permanent residency services; Singapore EP application services; and cross-border e-commerce mentoring and agency operations. If you have any needs or are interested, please feel free to contact me at any time (Consultation Hotline: 18676749275, add WeChat: Qicaiyingjituan).

On the surface, the shift from ”no tax rebates” to ”tax collection” appears to be a tightening of policy, but in essence, it is forcing companies to transition from extensive, unregulated exports to refined, compliant practices. Those companies that can quickly adapt to the new regulations and establish robust compliance systems will gain a larger market share in the upcoming industry shake-up.