Shanghai optimizes tax rebates to facilitate exporters

In 2023, Shanghai's foreign trade maintained steady and sound growth. To help enterprises increase their global presence, the Shanghai government has innovated its tax rebates to further lower the operating costs of foreign trade enterprises and unleash their vitality.

New policies boost private enterprises' global reach

The uncertainty of the global economic landscape, the long transaction cycle and delayed payment in cross-border trade all make enterprises unsure about future development.

To boost confidence of newly established export enterprises venturing into overseas market, the Shanghai tax authorities have compiled a list of such entities based on export tax refund (exemption) filing information. Through on-site visits, training sessions, and promotional activities, they have addressed policy and tax rebate procedure challenges, facilitating the global expansion of more businesses.

Lu Yao, the tax accountant of Keda Digital (Shanghai) Energy Technology Co Ltd, said, "Thanks to the efficient service of the tax authorities, we immediately applied for an export tax rebate of 870,000 yuan ($120,874) after our first export in 2023, significantly shortening the processing time. The thoughtful service and rapid response from the tax authorities have provided significant reassurance to our enterprise."

Accelerated tax rebate bolsters enterprises' confidence

Foreign trade often spans several months or even longer, placing rigid demands on enterprise cash flow. The continuous acceleration of the export tax rebate process provides strong support for foreign trade enterprises to maintain a smooth capital chain, strengthen the industrial chain, and enhance the service chain.

Many foreign trade enterprises have greatly benefited from such measures, like FMC (Shanghai) Agricultural Sciences Co Ltd. According to the company's financial manager, Li Lei, the approval time by tax authorities has accelerated by over 50 percent despite significant monthly rebate requests totaling tens of millions of yuan, ensuring prompt receipt of rebates.

The rapid disbursement of export tax rebate funds is achieved because Shanghai tax authorities have strengthened collaboration to ensure a smooth and accelerated tax rebate review process. The average processing time for export tax refunds for Class I and II enterprises with good credit has been reduced to just two working days.

Innovative tax measures drive cross-border e-commerce growth

Thanks to its national cross-border e-commerce comprehensive pilot zone, Shanghai's cross-border e-commerce is rapidly developing, becoming a new growth point in foreign trade.

Han Yi Trading (Shanghai) Co Ltd established overseas warehouses for direct product delivery since 2021. The company adopts a unique cross-border e-commerce export mode that exports goods to overseas warehouses. But it also has concerns about whether the tax rebate can be obtained swiftly. This is because the goods are not actually sold at the time of export declaration, and the recognition of income should be based on the actual sales date on the cross-border e-commerce platform, posing challenges in documents collection and export proceeds.

Upon learning about the situation, the tax authorities promptly formed a special team to provide guidance on income recognition, declaration operations, and document collection, thereby facilitating tax rebate processing for overseas warehouse businesses and promoting the development of such business.

Tax authorities in Shanghai aim to support innovative foreign trade models by implementing tax relief policies, improving inter-departmental cooperation, and providing professional, diverse, intelligent tax refund services. This initiative seeks to reduce the burden of foreign trade enterprises and help them gain better access to government services, contributing to the high-quality development of foreign trade in Shanghai.

Source: shanghai.chinatax.gov.cn