Export tariffs for machinery and equipment are essentially 0% (most machinery under HS Chapter 84 carries a 0% export tax rate, as China encourages exports). Key cost factors lie in export tax rebates (most machinery qualifies for a full 13% rebate, meaning the actual cost is approximately 88.5% of the tax-inclusive price) and import tariffs in the destination country (determined by the destination country’s HS code; MFN rates range from 0–15%, though these may be reduced under FTAs). When discussing “tariffs,” it is important to clarify whether the reference is to the export tax (0%) or the destination country’s import tax (calculated separately).
I.
China’s Export Tariffs
Export Tax Rates: Most machinery and equipment under HS Chapter 84 are subject to a 0% rate (e.g., the export tax rate for engineering drilling rigs under code 843069 is 0%, according to HS code data). Categories Subject to Export Tariffs: Tariffs apply only to a small number of resource-based products (machinery is not included). VAT: Exports are subject to a zero-tax rate (the 13% output VAT is not levied). Tax Rebates: Machinery qualifies for a full 13% rebate (covering excavators, generators, CNC machines, pumps, etc.)—China maintains a clear policy stance of “zero export tariffs plus full tax rebates” for machinery exports.
II. Export Tax Rebate Calculation
Tax Base: FOB price on the export invoice (standard for manufacturing enterprises; per Ministry of Finance & State Taxation Administration Announcement No. 11 [2026]); Rebate Amount: Price excluding tax × 13% (e.g., a pre-tax price of 100 Yuan yields a rebate of approx. 12.4 Yuan; actual tax cost ≈ 0); Rebate Conditions: Customs declaration + Special VAT invoice + Verification of foreign exchange receipt; Rebate Rate: Mostly 13% for Chapter 84 items, with 9% for specific sub-categories (verifiable via the Electronic Tax Bureau)—the rebate is crucial for export profitability (13% rebate ≈ 11.5% gain on the selling price).
III.
Import Duties in the Destination Country
MFN Rate: Applied by importing countries based on HS codes (varies from 5% to 15% across the EU, Southeast Asia, and Latin America); FTA Preferential Rates: Reduced duties (sometimes 0%) via Certificates of Origin under agreements like China-ASEAN or RCEP; Anti-dumping Duties: Applicable to specific machinery categories (e.g., wheels, fasteners); VAT/Consumption Tax: Levied separately by the importing country (e.g., EU VAT is around 20%)—Import duties + VAT = Landed tax costs (factor these into costs when quoting).
IV.
Key Points for Tariff Planning
First, precise HS sub-category classification (rates vary significantly between sub-categories); second, utilizing FTA Certificates of Origin (e.g., FORM E or RCEP for duty reductions); third, separate declarations (classifying main units and accessories separately); fourth, confirming rebate rates (checking the latest tariff schedule before shipment); fifth, working backward from duties to set quotes (factoring import duties, VAT, and freight into the DDP price)—zero export duties plus a 13% rebate constitute an export-side benefit, while the tax burden in the destination country is optimized via FTAs.
V. Notes for Overseas Buyers
First, clarify which “customs duty” is being referred to (China’s 0% export duty vs. the destination country’s import duty); second, request the HS code and tax rebate rate (ensure these are specified in the contract); third, leverage FTA rules of origin (to reduce import duties in the destination country); fourth, calculate the total landed cost (CIF + duties + VAT); and fifth, determine the allocation of the tax rebate (decide whether the factory or the agent receives the 13% rebate)—for machinery exports, the export duty is 0%, the tax rebate is 13%, and the destination country’s import duty ranges from 5% to 15% (which can be reduced via an FTA);
ensure all three components are accurately calculated before quoting a price.
