April 1 affect the export rebate

The decision to reduce the VAT tax rate will be implemented on April 1 has a significant impact on export rebates. This paper summarizes the relevant provisions of last year and this year, and makes a legal analysis.

Many netizens feel that tax cuts are unprecedented and powerful. They are also very concerned about how the export tax rebate rate will be adjusted, and what impact will they have on export enterprises.

According to last year's policy development, Xiaobian believes that the export rebate rate should be reduced. As for when and how to reduce it, there is no new policy yet.

Let us recall that the introduction of VAT tax rate adjustment policy last year was a process like this:

1. On March 5, 2018, in the Report on the Work of the Government delivered at the first meeting of the 13th National People's Congress, it was pointed out that "further reducing the tax burden of enterprises". Reform and improve the value-added tax system, adjust the tax rate according to the three-tier and two-tier direction, focus on reducing the tax rate of manufacturing, transportation and other industries, and improve the annual sales Standard of small-scale taxpayers.

2. On March 20, 2018, the First Session of the Thirteenth National People's Congress voted to adopt a resolution on the report on the work of the government and approved the report.

3. On April 4, 2018, the Ministry of Finance and the General Administration of Taxation jointly issued the Notice of the General Administration of Taxation of the Ministry of Finance on the Adjustment of VAT Tax Rate (No. 32 of Finance and Taxation, 2018), and decided to adjust the VAT tax rate from May 1, 2018. The export rebate rate has also been adjusted accordingly.

First, how to adjust the export rebate rate?

The current VAT export rebate rates are 16%, 13%, 10%, 6% and 0, totaling five categories. Referring to last year's practice, it is expected that this year's adjustment will be 13%, 10%, 9%, 6% and 0, and will remain in the five-tier category. The adjustments of 16% and 16% are 13% and 13% respectively; 16% and 10% are 13% and 10%; 10% and 10% are 9% and 9%; 16% and 6% and 10% are 9%, 6% and 6%, 6% and 6% respectively; 16% and 10% are 13%, 10% and 0% and 0, respectively.

Contrast Table before and after Tax Adjustment (Click to View the Big Map)

2. What are the criteria for adjusting the execution time of VAT export rebate rate and the time of export goods?

In accordance with the past practice, adjusting the execution time of the export rebate rate and the time of export goods belongs to the goods declared and exported to the Customs, whichever export date is indicated on the export declaration form; goods sold for export other than customs declaration shall be subject to the time of issuance of export invoices or ordinary invoices; goods exported by enterprises or other units in the bonded area and the insured goods. Goods exported from the tax area shall be subject to the export date specified in the export goods record list issued by the Customs at the time of departure.

The execution time of tax rebate for cross-border taxable acts and the time of sales of cross-border taxable acts shall be adjusted according to the date of issuance of export invoices.

Third, what kind of transitional policy will there be?

Last year's transitional policy stipulated the following:

Foreign Trade Enterprises: The cross-border taxable acts of goods and sales covered by Article 4 of Document No. 32 [2018] before July 31, 2018 [Article 4 of Document No. 32] when purchasing goods, which have been levied VAT at the pre-adjustment tax rate, shall be executed with the pre-adjustment export rebate tax rate; if VAT has been levied at the post-adjustment tax rate at the time of purchasing, the post-adjustment export rebate tax rate shall be executed.

Manufacturing enterprises: the cross-border taxable acts involved in Article 4 of Document No. 32 [2018] and Article 4 of Document No. 32 [2018] before July 31, 2018] shall be executed and the pre-adjustment export rebate rate shall be implemented.

It should be noted that the transitional period policy only focuses on the cross-border taxable acts of goods and sales covered by Article 4 of Document No. 32 [2018] and the rest only reduces the taxable rate, while the export rebate rate remains unchanged, or the taxable rate and rebate rate do not decrease, the labor services and cross-border taxable acts of export goods remain unchanged, and there is no transition. Period.

Summarize last year: May 1 to July 31 last year is a transitional period. During this period: foreign trade enterprises, if they had previously returned 17% of the invoices, the transitional receipts would be 17% and 17% and 16% respectively. If the enterprises had previously returned 17%, the transitional period would still be 17% and 17%, which has nothing to do with the tax rate of input invoices.

Expected this year: This year's tax cuts are basically the same as last year's. It is estimated that there will also be a transitional period for export enterprises. If foreign trade enterprises refund 16% in the past, they will refund 16% in the transitional period and 13% in the transitional period, and if they refund 16% in the past, they will still levy 16% in the transitional period, which has nothing to do with the tax rate of the import invoice. Xiaobian believes that this year is at least similar to last year, and maybe it will be further improved.

4. What is the policy after the transition period?

Starting from X1, 2019, foreign trade enterprises and production enterprises, as well as the goods and cross-border taxable acts involved in the export sales documents, will execute the adjusted export rebate rate regardless of whether VAT has been levied at the pre-adjustment tax rate at the time of purchase or at the post-adjustment tax rate.

What is the impact on export enterprises?

1. Tax rate is the same as tax rebate rate, and all of them decrease by three or one percentage point: although the VAT rate is reduced before and after the reduction of the VAT tax rate, the implementation of complete tax rebate, but due to the reduction of tax rate, the capital occupation of enterprises is reduced correspondingly, and the impact on export enterprises is slightly more neutral.

2. The situation where the tax rate falls and the rebate rate does not fall: This situation raises the levy and rebate rate.