China expands instant tax refund for foreign tourists

While the U.S. wages a tariff war, China has expanded its instant tax refund policy nationwide for purchases made by overseas tourists to fully unleash the potential of inbound tourism consumption.

The service, which allows foreign visitors to receive tax rebates immediately after buying, rather than upon departure, was previously piloted in cities including Beijing, Shanghai, Guangzhou, Hangzhou and Chengdu.

Under the new rules introduced by the State Taxation Administration (STA) on April 8, tourists making purchases at designated stores can receive their refunds on the spot after completing a credit card pre-authorization. Upon departure, customs will verify the traveler's identity and the goods, and the refund agency will lift the pre-authorization once all the information is confirmed.

To apply for the refund, foreign tourists in central China's Hunan Province should remember that their stay in China must not exceed 183 days and they must depart via Changsha or Zhangjiajie airports within 17 days. 

One overseas visitor can purchase tax-refundable goods worth between 500 yuan (around $58) and 50,000 yuan from the same tax refund shop on the same day.

Moreover, in some shopping malls, tourists can even skip the form-filling process – they only need to present their passports and the system will automatically retrieve their shopping details, calculate the refund amount and allow them to confirm with a signature.

For example, there are currently more than 120 tax-refund stores in east China's Zhejiang Province alone. At a store in Yiwu City, a Turkish traveler named Marck told China Media Group (CMG) that due to business trips, he frequently shops there. Now, with the new tax refund policy, he can immediately receive an 11 percent value-added tax (VAT) refund on the spot.

Another tourist, named Irina, was also amazed to see her refund process completed in about five minutes. "The refund goes directly into my account. It's really fast. I think the experience is fantastic," she told CMG.

Data from the STA showed that in 2024, the number of overseas tourists applying for tax refunds, the sales of tax-refundable goods, and the total refund amount increased by 2.3 times, 1.2 times and 1.3 times year-on-year, respectively.

The tax authorities will strengthen policy interpretation and guidance, continuously upgrade system functions, optimize the refund process and actively support efforts to attract overseas tourists to spend in China, said the STA.