Tax Policy

China’s Value-Added Tax (VAT) regime entitles exporters to obtain a VAT refund when their goods are exported. The amount of VAT refunds that exporters are entitled to depends on the Export VAT Refund Rates (EVRRs) which apply to the exported products. EVRRs range from 0% (i.e., VAT is not refundable) to 17% (i.e., VAT is fully refundable). The applicable EVRRs may be determined by the PRC Tariff Numbers (PRC TNs) of the exported goods.

September 14, 2006: EVRR for steel products 11% -> 8%  

The Ministry of Finance, the National Development and Reform Commission, the Ministry of Commerce, the General Administration of Customs and The State Administration of Taxation jointly announced a major revision to the Chinese export VAT refund policy. Under this revision, the refund rate for steel products under 142 tariff heading has been reduced from 11% to 8%[i].

April 10, 2007: EVRR for steel products 8% -> 0% or 5% 

China eliminated export VAT rebate on some steel exports and reduced VAT refund rate from 8% to 5% on higher-value steel products in response to the pressure from other countries[ii].

 August 1, 2008- June 1, 2009: EVRR for steel products 0% -> 9% or 13%[iii]

Chinese government adjusted the export VAT refund rates for seven times from August 2008 to June 2009[iv] in order to give the depressed exports a boost.  The export VAT refund rate was increased to 9% for hot-rolled steel and some other steel products[v], and 13% for certain flat and long steel products[vi].

June 22, 2010: EVRR for some steel products 9% or 13% ->0%[vii]          

To limit exports in high polluting, high energy-consuming and resources sector, the MOF and the State Administration of Taxation issued Cai Shui (2010) No. 57 and abolished the tax rebate for some steel products.


[ii]'s VAT rebate would be 5% for exports such as tinplate, color coated, non-alloy steel forged bars and silicon steels. Most types of cold rolled coil and hot dipped galvanized steel also would enjoy 5% rebate.The rebate has been abolished for hot rolled plate, hot rolled coil, sections, H-beams, I-beams, channels, merchant bars, angles, wire rods and most other longs. Most stainless steels - with the exception of low-nickel containing series - will continue to enjoy 5% rebate. However, the rebate has been abolished for exports of ferro-manganese stainless with nickel content of less than 7 percent.