China has expanded its travel retail VAT tax rebate scheme for foreign tourists to include Beijing and Shanghai as part of plans to attract more overseas visitors.

 
First launched in Hainan Province four years ago, the tax rebate scheme has recently been extended to cover Beijing and Shanghai where a variety of downtown and airport shops have been approved to refund VAT on purchases made by foreign visitors.

 

 

“Since July 1, 2015, Beijing city has begun a departure shopping tax rebate policy,” said a spokesman for Beijing Capital Airport Commercial & Trading Co Ltd (ACT), which is responsible for commercial operations at Beijing Capital International Airport.

 

 

He told TRBusiness: “Foreign travellers shopping in a tax rebate shop can get a refund of VAT on rebatable items. ‘Foreign travellers’ refers to foreigners who live for no more than 183 consecutive days in the territory of China, Hong Kong, Macau and Taiwan.”

 
He added that the Chinese government has approved more than 80 shops in Beijing to operate the travel retail VAT rebate scheme, along with a number of shops in Shanghai.

 

 

 

Foreign visitors presenting their passports receive an on-the-spot refund of the 11% VAT rate levied on purchases of items costing more than RMB500 ($81), providing their intended date of departure from China is no more than 90 days after making the purchase.

 
After completing their purchase shoppers are able to hand over their till receipt with a completed tax rebate application form at the shop’s designated VAT rebate counter to receive their refund.

 
Items purchased under the tax rebate scheme should then be taken abroad by travellers, said the spokesman, either as carry on luggage or checked-in baggage when departing from China. Most shops that have registered to operate the travel retail tax refund scheme are located in downtown Beijing and Shanghai.

 
ACT, which is responsible for commercial operations, including duty free and duty paid shops in Beijing Airport’s three terminals, opened the airport’s sole tax rebate shop on July 1. The souvenir and gift shop is located on Level 4 in the landside departure area of Terminal 3, which handles a large proportion of the airport’s foreign passengers.

 

 

“ACT has collaborated with Shunyi National Tax Bureau to ensure the smooth running of the value added tax invoice and departure tax rebate scheme in a short period of time,” the spokesman said. “ACT leaders and the chief of the relevant department have made on the spot inspections to make sure the tax return policy is operating on solid ground.

 

 

“In future, ACT will continue to strengthen the departure tax rebate store promotional work, to optimize the departure tax rebate service process and to provide more foreign passengers with a pleasant shopping experience.”

 

 

 

Currently, ACT is promoting its tax refund gifts and souvenir shop through the company’s website and by advertising in Beijing city government brochures and other media sources that foreign visitors are likely to see.

 

 

The spokesman explained that the shop is authorised to issue tax refunds only to customers purchasing goods in the shop under the VAT rebate scheme and does not handle refund claims for items purchased in other shops.  “Only customers purchasing on the same day in the same tax rebate shop and purchases over RMB500 can get the tax rebate in the shop,” the spokesman said.

 

 

Meanwhile, China is believed to be considering extending the VAT rebate scheme for foreign visitors to other popular tourist destinations in future: “There are 86 shops in Beijing – including at the airport and downtown – that can operate the tax rebate scheme. The government started the tax rebate scheme in Hainan Province in 2011 and then Beijing and Shanghai started this year,” the spokesman said.

 

 

“It’s reported that China will continue to develop the tax refund scheme in future, but it is not certain which cities and when they will have the tax rebate scheme.”

 

 

Beijing Capital Airport Commercial & Trading Co Ltd (ACT) is a subsidiary of Capital Airport Holdings (CAH), China’s largest airport holding company which, in addition to owning Beijing Capital Airport, owns about 40 other airports and other companies including ACT and various aviation service firms.

 

 

ACT is responsible for commercial operations including duty free and duty paid shops at Beijing Capital Airport and seven other airports. The airports are: Tianjin International Airport; Chongqing International; Wuhan International in Hubei; Nanchang International in Jiangxi; Changchun International in Jilin; Hohot International in Inner Mongolia; and Harbin International in Heilongjiang Province.