Whether Chinese machinery quotes include tax depends on the sales channel and pricing basis—domestic trade quotes usually include 13% VAT (invoiced price), while foreign trade quotes are typically tax-exclusive FOB prices (subject to a 0% export tax rate and a 13% tax rebate). When inquiring about prices, be sure to clarify whether the quote is “tax-inclusive” or “tax-exclusive,” as the price difference between these two bases is approximately 11.5%.
I.
Domestic Trade Quotes: Usually Include 13% VAT
The standard VAT rate for domestic sales of machinery and equipment is 13% (based on PwC tax rate tables and ETCN HS code data).
Manufacturers generally quote domestic customers an invoice price that includes tax (issuing a 13% special VAT invoice); however, some small manufacturers or traders may quote a “tax-exclusive price” (requiring an additional 8–10% surcharge for invoicing). For domestic procurement, it is essential to confirm whether the price includes tax and whether a special VAT invoice can be issued (allowing for input tax deduction).
II.
Foreign Trade Quotes: Mostly Tax-Exclusive FOB/EXW
Exports are subject to a 0% VAT rate plus an export tax rebate (Ministry of Finance and State Taxation Administration Announcement No. 11 of 2026: for manufacturing enterprises, the tax rebate calculation is based on the FOB export price). Most machinery and equipment (HS Chapter 84) qualify for a 13% export tax rebate (full rebate/full refund list). Standard foreign trade quoting practice involves a tax-exclusive ex-factory price plus an invoicing surcharge (e.g., 100 yuan tax-exclusive price + 8 yuan for invoicing = 108 yuan tax-inclusive; with a 13% rebate of 12.4 yuan, the actual tax cost is effectively zero). Consequently, foreign trade orders typically involve invoicing to facilitate the tax rebate process.
III. Converting Between Tax-Inclusive and Tax-Exclusive Prices
First, tax-inclusive price = tax-exclusive price × (1 + 13%) (for domestic trade); second, invoicing surcharge: factories often quote a price “plus 8–10 points” for invoicing (actual tax burden + surcharges); third, export tax rebates: rebate amount = FOB price in RMB × rebate rate of 13% (capped at actual input VAT)—net cost for foreign trade = tax-inclusive purchase price − rebate amount; fourth, quote confirmation: contracts should specify “includes 13% VAT special invoice” or “FOB tax-exclusive”—ambiguity here leads to pitfalls.
IV.
Other Taxes and Fees
Imports: For machinery imported into China, 13% VAT is calculated based on the CIF value plus customs duty (relevant for non-export buyers); customs duties: MFN (Most-Favored-Nation) rates for most machinery range from 0% to 10% (e.g., 0% for CNC machine tools, 6–10% for other machinery); surcharges: City Maintenance and Construction Tax/Education Surcharges (part of the invoicing cost for domestic trade)—not applicable to zero-rated exports.
V.
Key Points for Overseas Buyers
First, inquiry template: clearly specify “EXW/FOB tax-inclusive or tax-exclusive price”; second, invoices: request both a proforma invoice and a VAT special invoice (required for tax rebates); third, rebate rates: confirm the rebate rate corresponding to the HS code (full 13% rebate vs. partial 9% rebate); fourth, freight forwarder: handle customs declaration and tax rebate documentation (including export proceeds verification/settlement); fifth, payment: T/T (Telegraphic Transfer) with deposit and balance payment (standard practice in foreign trade).
Industry insiders advise checking the basis of price quotations regarding taxes: domestic trade quotes usually include the 13% VAT special invoice, whereas foreign trade quotes are typically ex-tax FOB prices (plus export tax rebates). Contracts should explicitly state whether the price includes tax and specify the HS code tax rebate rate;
ensure all terms align before signing.
