I. Distinguish Between the Two Tax Rebate Methods
According to Announcement No. 11 [2026] of the Ministry of Finance and the State Taxation Administration regarding VAT and consumption tax policies for export operations, the applicable export tax rebate method depends on the enterprise’s status. Manufacturing enterprises (taxpayers with production capabilities) exporting self-produced goods are subject to the “Exemption, Credit, and Refund” method: VAT is exempted at the export stage; the corresponding input VAT is first used to offset VAT payable on domestic sales, and any remaining un-offset amount is refunded.
Foreign trade enterprises (taxpayers without production capabilities) exporting purchased goods are subject to the “Exemption and Refund” method: VAT is exempted at the export stage, and the input VAT incurred at the purchasing stage is directly refunded.
The photovoltaic component industry includes both manufacturers that produce items like mounting brackets and connectors, and trading companies that purchase goods for export;
the calculation formulas for these two types of enterprises differ completely, so one must determine the enterprise status before calculating the tax.
II.
Calculation Formula for Export Tax Rebates
The calculation for foreign trade enterprises is straightforward: Refundable VAT Amount = VAT Rebate/Exemption Calculation Base × Export Tax Rebate Rate.
The calculation base is the amount stated on the special VAT invoice for the purchased export goods (i.e., the purchase price excluding tax), not the export sales price.
The calculation for manufacturing enterprises involves three steps: Step 1: Calculate the tax payable for the current period = Current output VAT – (Current input VAT – Amount of tax ineligible for exemption or credit); Step 2: Calculate the “Exemption, Credit, and Refund” (ECR) limit = FOB price of exported goods × RMB exchange rate × Export tax refund rate – Deductions from the ECR limit; Step 3: Comparison: If the VAT credit carried forward at the end of the period ≤ the ECR limit, the tax refund for the current period = the VAT credit carried forward, and the difference represents the amount of VAT exempted and credited; if the VAT credit carried forward > the ECR limit, the tax refund for the current period = the ECR limit.
Note that the amount of tax ineligible for exemption or credit = FOB export price × exchange rate × (Applicable tax rate – Export tax refund rate);
this figure is zero when the refund rate equals the applicable tax rate.
III. Calculation Examples
Example 1 (Foreign trade enterprise): A trading company purchases a batch of photovoltaic mounting brackets; the special VAT invoice shows an amount of RMB 1 million and tax of RMB 130,000, with an export tax refund rate of 13%. The refundable tax amount = RMB 1 million × 13% = RMB 130,000 (almost the full amount of input VAT is refunded).
Example 2 (Manufacturing enterprise): A bracket manufacturer has a current-period FOB export value of RMB 2 million (converted to RMB); both the applicable tax rate and the refund rate are 13%; the VAT credit carried forward at the end of the period is RMB 200,000. The amount of tax ineligible for exemption or credit = RMB 2 million × (13% – 13%) = 0; the ECR limit = RMB 2 million × 13% = RMB 260,000. Since the carried-forward credit of RMB 200,000 ≤ RMB 260,000, the refundable tax amount for the current period = RMB 200,000, and the exempted/credited VAT amount = RMB 60,000.
If the carried-forward credit were RMB 300,000 (exceeding the ECR limit of RMB 260,000), the refundable tax amount would be RMB 260,000.
IV. Key Practical Points on Tax Refunds for Photovoltaic Components
First, the applicable tax refund rate is determined by the official tax refund rate database: Unless otherwise specified by the State Council, the export tax refund rate generally corresponds to the applicable tax rate (e.g., current VAT rates of 13% or 9%) and is published by the State Taxation Administration. Refund rates may vary for different items—such as PV modules, mounting structures, and cables—based on their HS codes; therefore, one must verify the rate against the specific code listed on the customs declaration. If the refund rate is lower than the applicable tax rate, the difference is recorded as a cost of the export business.
Second, the tax calculation basis requires careful distinction: Manufacturing enterprises calculate the basis using the actual FOB price of the exported goods (based on the export invoice), whereas foreign trade enterprises use the purchase amount stated on the special VAT invoice;
these methods must not be conflated. Third, complete documentation is mandatory: Applications for tax refunds require valid and lawful documentation, such as customs declarations, special VAT invoices, and proof of export proceeds collection. Exports lacking purchase documentation are ineligible for refunds, and transactions associated with fraudulent refund claims do not qualify for refund policies.
Fourth, transactions subject to different refund rates must be declared and accounted for separately;
if they are not separated or clearly distinguished, the lower refund rate applies.
Fifth, the export date determines the timing of the refund rate application, based on the export date recorded on the customs declaration.
Conclusion
The process for export tax refunds on PV components can be summarized as “determine entity type, apply the formula, and verify documentation”: foreign trade enterprises calculate the refund by multiplying the purchase invoice amount by the refund rate, while manufacturing enterprises follow the “exemption, credit, and refund” (Mian-Di-Tui) method; in both cases, the customs declaration, invoice, and proof of payment collection must align.
Accurately calculating tax refunds not only directly improves cash flow but also serves as a critical cost factor in export pricing, warranting joint oversight by both the finance and business departments.
