1. Goods and Services Eligible for VAT Refund

On the basis of equality and reciprocity, the consular post and its consular officers and the administrative or technical personnel who are neither Chinese citizens nor permanent residents in China are eligible for the refund of value added tax (VAT) for the goods and services purchased in China. Goods and services categorized as VAT taxable by Provisional Regulations on VAT of the People's Republic of China and to be imposed VAT according to the current regulations are eligible for VAT refund if the single invoice for such goods or services amounts to RMB 800 yuan or more. However, there is no such a limit of minimum amount for invoices for water, electricity, gas and heating supplies and relevant repair and maintenance.

2. Procedure for Tax Refund

The procedures for tax refund are as follows. Each quarter, the embassy of the sending state in China consolidates the tax refund application of the consular post and its eligible members in the Tax Refund Application Form for Foreign Embassy and Consular Posts in China and presents for verification, prior to the 10th day of the first month of the following quarter, to the Department of Consular Affairs of the Ministry of Foreign Affairs together with the invoices of goods and services purchased. If the tax refund is applied for the building material and equipment for the construction or renovation of the consular premises, an audit report produced by an accountant's office registered in the Chinese territory must be included in the application although no regular invoices are required. In this case, the Application Form will not become effective unless signed by the head of the consular post or the consular officer authorized by the head of the consular post. After reviewing and auditing the documents for tax refund delivered by the Ministry of Foreign Affairs, the tax department will refund and remit the due amount directly to the bank account for Renminbi of the relevant embassy in a bank located in Beijing.

3. Tax Exemption for Vehicle License and Gasoline

Both official motor vehicles of the consular post and private motor vehicles of the consular officers are entitled to tax exemption for application and use of license, auto parts and repair (taxable services), gasoline or diesel. Information concerning the detailed procedures is available at the Foreign Affairs Office or tax departments.

4. Highway and Bridge Tolls and Airport Construction Fee

In China, most of the roads, bridges and tunnels are free to use, but some public facilities such as airports and highways are not free of charge. The highway and bridge tolls and the airport construction fee are collected mainly for the maintenance and repair of the public facilities. In addition, some tolls or fees are collected as charges, rather than taxes and levies, for the use of relevant public facilities invested by the enterprises.

The passengers holding diplomatic passports are exempt from the airport construction fee when traveling out of China by international flights, including those to Hong Kong or Macao.

Editor: Wing