As the foreign trade industry continues to be active, more and more market entities of different sizes are joining the cross-border export track. However, export tax rebate policies are highly professional, and many practitioners are easily confused about the rules for similar scenarios. The most common cognitive misunderstanding is to confuse the tax rebate policies of “small-scale taxpayers’ self-operated exports” and “general taxpayers purchase from small-scale taxpayers and then export”, which may even cause unnecessary loss of profits.
First of all, it needs to be made clear that the applicable rules for the two types of scenarios are completely different. The core distinction is based on the declaration subject of the export business, not the procurement source of the source of goods.
1. Small-scale taxpayers can only enjoy the tax exemption policy for self-operated exports
If the reporting entity of the export business is a small-scale VAT taxpayer, regardless of whether the source of goods purchased is from a small-scale taxpayer or a general taxpayer, and regardless of whether the purchase is a special VAT invoice or an ordinary invoice, in accordance with the “Announcement of the Ministry of Finance and the State Administration of Taxation on Value-Added Tax and Consumption Tax Policies for Export Business” (Ministry of Finance
According to the State Administration of Taxation Announcement No. 11 of 2026), you can only enjoy the export tax exemption policy and cannot apply for export tax rebates.
This is also the main source of the stereotype that many practitioners form the stereotype that “tax refunds cannot be made if the export involves small scale”. However, this rule only applies to scenarios where the export subject is a small-scale taxpayer, and the scope of application cannot be expanded at will.
2. General taxpayers can enjoy tax refunds if they meet the conditions for small-scale export purchases
If the declaration subject of the export business is a foreign trade enterprise that is a general taxpayer of value-added tax, and only the supplier in the procurement link is a small-scale taxpayer, it will not affect the application for tax refund qualifications at all. As long as the relevant conditions stipulated in the policy are met, you can normally enjoy the tax refund-free policy and apply for export tax refunds.
It is important to note that the “lower principle” applies to the tax refund rate in this type of scenario: since special VAT invoices issued by small-scale taxpayers are subject to a collection rate of 1% or 3%, the actual input tax borne by the enterprise is only the amount corresponding to the face tax rate. Therefore, the conventional tax refund rate for the corresponding goods cannot be directly applied when refunding, and the tax refund rate needs to be matched with the tax rate on the input invoice.
For example, the regular export tax refund rate for a certain product is 13%, but when the enterprise purchases it, it obtains a special VAT invoice with a 3% tax rate issued by a small-scale taxpayer. When filling in the tax refund declaration information at the single window or the electronic tax bureau, the tax refund rate for the product needs to be manually adjusted from 13% to 3%. The tax department will only refund the input tax actually paid by the enterprise, and will not refund the tax beyond the actual amount paid.
If the enterprise fails to manually adjust the tax refund rate, it will directly lead to the failure of the tax refund declaration review, lengthen the tax refund payment period, and may even trigger a tax abnormality warning.
In addition, there are two practical details that foreign trade companies need to pay attention to: First, if a general taxpayer obtains a general VAT invoice when purchasing goods from a small-scale taxpayer, then because there is no compliance
If the enterprise cannot provide compliant input credit vouchers for the procurement process, it will not be able to apply for tax refunds and can only apply for export tax exemption policies; secondly, if the enterprise cannot provide compliant invoices for the procurement process, not only will it not be able to enjoy tax exemption and tax refund benefits, but it will also need to pay value-added tax according to the rules of deemed domestic sales, which will increase additional tax costs.
It is recommended that foreign trade companies should plan in advance for procurement channels and invoice types before starting business, and financial personnel should also update the latest export tax rebate policy knowledge in a timely manner to avoid damage to corporate interests due to cognitive biases.
