China will extend its value-added tax refund policy for inbound tourists to a series of new locations from July 1, including the northern coastal city of Dalian and the central province of Hubei.
It is just the latest in a series of moves by Beijing to make it easier for tourists to get tax refunds on retail purchases made during their trips. Other recent changes include allowing tourists to claim refunds at stores as well as border crossings.
The new policies are designed to stimulate the Chinese economy by offering tourists a bit of cash back, in the hope they will use that money to buy even more.
Compared with other countries offering tax refunds 鈥 such as Australia, Canada and Japan 鈥 China is a relative newcomer, with its refunds limited to a smaller number of regions and stores. But there are still significant savings to be made.
Who qualifies for departure tax refunds in China?
Visitors from any foreign country who spend fewer than 183 days in mainland China before departing are eligible for refunds. Tourists from Hong Kong, Macau and Taiwan also qualify.
Shoppers seeking refunds should carry a personal credit card, sign an agreement with each eligible merchant and, while at the store, complete a credit card pre-authorisation form.
Refund applicants must show a visa or passport stamp as well to prove they plan to leave China within the specified time limit.
Between April 27 and May 26, the number of departure tax refund transactions processed by tax authorities was up 116 per cent year on year, and sales at refund-eligible stores grew 56 per cent, according to China鈥檚 State Taxation Administration.
Where can tourists shop for tax-refundable goods?
The changes introduced since April have expanded the roster of stores that can offer refunds, especially outside airports and other transit spaces.
The number of participating stores had reached 5,196 as of June, an increase of 40 per cent since the end of 2024, according to the state media outlet China Daily.
The policies originally covered the major cities of Beijing, Shanghai and Shenzhen, but have expanded since then. Eventually, all of China will join the programme, said Giulia Interesse, an editor with business consultancy Dezan Shira & Associates鈥 China Briefing.
Which types of merchandise qualify for tax refunds?
Most common goods found in stores anywhere in China qualify for tax refunds. Exceptions include cultural relics, gold, silver, high-end Chinese medicines and certain audiovisual materials.
Tourists must spend at least 200 yuan (US$27.90) at a single store on a given day to qualify for a refund.
How and where can tourists process tax refunds?
In April, China began letting tourists process tax refunds at the stores where they made their purchases. Previously, they had to apply via special tax refund counters at border checkpoints like airports.
This change simplifies the refund process and 鈥渆ncourages immediate reinvestment of refunded amounts into China鈥檚 domestic economy鈥, according to Dezan Shira.
How large are the tax refunds on offer in China?
Travellers should get a refund of about 9 per cent of the full purchase price, which is equivalent to the average tax rate minus a service fee, Interesse said. Prices at stores in China usually include the value-added tax.
Since April, the minimum purchase price to qualify for a refund has been set at 200 yuan 鈥 down from 500 yuan previously 鈥 with refunds capped at 20,000 yuan.