Export tax rebate rates for machinery and equipment: Most machinery under Chapter 84 qualifies for a full 13% rebate (e.g., excavators, generators, CNC machines, pumps; though specific sub-categories may be 9%) — Zero-rated export + full VAT refund; Tax calculation basis = Export invoice FOB price (for manufacturing enterprises; per Ministry of Finance & State Taxation Administration Announcement No. 11 of 2026); Example: For a pre-tax price of 100 Yuan, a 13% rebate yields approx. 12.4 Yuan, resulting in an actual tax cost of ≈ 0.
I.
Rebate Rate Tiers
13% (Full Rebate): Mainstream machinery under Chapter 84 (excavators, CNC machine tools, pumps, generators, printing presses; per 2026 standards); 9%: Certain electrical equipment and agricultural machinery sub-categories; 0% (Tax Exemption): Specific categories (the difference between the statutory tax rate and the rebate rate represents the non-refundable tax cost); Inquiry: Electronic Tax Bureau → Export Tax Rebate Rate Inquiry (enter HS code) — Rebate rates vary by HS sub-category for the same equipment; verify item-by-item before shipment.
II.
Tax Calculation Basis
Manufacturing Enterprises: Export invoice FOB price (calculated via the “Exemption, Credit, and Refund” method; per Ministry of Finance & State Taxation Administration Announcement No. 11 of 2026); Foreign Trade Enterprises: Purchase amount stated on the special VAT invoice × rebate rate; Agency Exports: Rebate goes to the principal (factory) or the agent (depending on the agreement) — Rebate amount = FOB price (excluding tax) × 13% (Example: FOB 100 Yuan yields a 12.4 Yuan rebate).
III. Conditions for Tax Refunds
The requirements are: 1. Customs declaration (actual export); 2. Special VAT invoice (purchase invoice); 3. Receipt of foreign exchange (payment received and verified); 4. Document alignment (consistency among customs declaration, invoice, and payment data); and 5. Declaration deadline (filing within the prescribed period after export). All four elements must be in order for the refund to be processed (delays or discrepancies result in the transaction being treated as a domestic sale subject to tax payment).
IV.
Impact of Tax Refunds on Profitability
Tax refund ≈ 11.5% of the selling price (based on a 13% refund rate and calculation using the tax-inclusive price); Example: A tax-inclusive price of 113 RMB (including 13 RMB tax) yields a 12.4 RMB refund upon export → actual cost ≈ 100.6 RMB (tax cost ≈ 0). Comparison: Exports without tax refunds (treated as domestic sales) incur an extra 13% tax cost. Tax refunds are crucial for competitive export pricing (the refund amount can be passed on as a price discount or counted as profit).
V.
Points for Overseas Buyers
Key considerations include: 1. Inquiring about the refund rate (specify the HS code and refund rate in the contract); 2. Ownership of the refund (clearly state this in agreements with factories or agents); 3. Pricing flexibility (using the refund amount as a bargaining chip for discounts); 4. Invoicing (factories must issue special VAT invoices); and 5. Agency-based refunds (manufacturers without direct foreign trade rights use agents to handle refunds). For machinery exports, the refund rate is generally the full 13% (with some items at 9%), calculated based on the FOB price;
the refund amounts to approximately 11.5% of the selling price, representing a core area for price concessions during negotiations.
