China
China Tax Update: January 2025 Edition
China’s State Taxation Administration has introduced a new tax refund policy for cross-border e-commerce, allowing refunds for goods exported through overseas warehouses. This aims to streamline processes, enhance competitiveness, and support key industries in the Lingang New Area with reduced corporate income tax rates.
In a significant move to bolster the cross-border e-commerce sector, China’s State Taxation Administration (STA) has announced a new tax refund policy for goods exported through overseas warehouses. The policy, detailed in STA Announcement [2025] No. 3, introduces a “tax refund upon departure” mechanism for goods under customs supervision code “9810.” This initiative aims to streamline the tax refund process, expedite refunds, and reduce costs for enterprises, thereby enhancing their competitiveness in the international market.
Key provisions of the announcement include:
This policy is part of the STA’s efforts to support cross-border e-commerce businesses, simplify tax refund procedures, and alleviate financial pressures on enterprises. By clarifying the application and reconciliation processes, the announcement aims to ensure compliance, improve cash flow, and enhance the efficiency of fund utilization for businesses. Additionally, companies may need to upgrade their financial and logistics information systems to better integrate with electronic tax bureaus and international trade single windows, thereby improving data processing efficiency and accuracy.
The Shanghai Municipal Finance Bureau, the State Taxation Administration Shanghai Branch, and the Shanghai Municipal Commission of Economy and Informatization have jointly issued the Administrative Measures for the Recognition of Corporate Income Tax Incentive Qualifications for Key Industries in the Lingang New Area of China (Shanghai) Pilot Free Trade Zone (Hu Cai Fa [2024] No. 12). This revised guideline, effective from January 1, 2025, aims to streamline the qualification process for corporate income tax (CIT) incentives, fostering industrial upgrades, attracting investment, and enhancing regional economic competitiveness.
According to the provisions, enterprises in key sectors such as integrated circuits, artificial intelligence, biomedicine, and civil aviation, located in the Lingang New Area, are eligible for a reduced CIT rate of 15 percent for the first five years from their establishment, provided they engage in substantial production or R&D activities.
To qualify for the tax incentives, enterprises must meet the following conditions:
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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