Complete Guide to Tax Refunds in China: What Every Traveler Should Know
Planning a shopping spree in China? Understanding the country’s tax refund system can save you significant money on your purchases. China’s tax refund policy allows eligible foreign visitors to reclaim the Value Added Tax (VAT) paid on goods purchased during their stay. This comprehensive guide will walk you through everything you need to know about claiming tax refunds in China, from eligibility requirements to the application process and practical tips.
Important Update
As of April 2025, China has implemented a new instant VAT refund system that allows eligible tourists to receive tax refunds immediately at the point of purchase, rather than waiting until departure. This guide includes the latest information on both traditional departure refunds and the new instant refund system.
Table of Contents
Understanding China’s Tax Refund System
What is China’s Tax Refund Policy?
China’s tax refund policy, officially known as the “Departure Tax Refund for Foreign Tourists,” allows eligible visitors to claim a refund of the Value Added Tax (VAT) paid on goods purchased from designated tax refund shops during their stay in China. The policy was introduced to boost tourism and retail spending by international visitors.
The standard VAT rate in China is 13% for most consumer goods, with some items taxed at 9%. However, the actual refund rate is typically 11% for items with a 13% VAT rate and 8% for items with a 9% VAT rate, as a 2% service fee is deducted from the refundable amount.
Tax Refund Rates
Growth in Tax Refund Volume (2020-2025)
Top Cities for Tax Refunds
Two Refund Systems: Traditional vs. Instant
China currently operates two tax refund systems for international travelers:
- Traditional Departure Refund: The original system where tourists apply for refunds at the airport or border crossing when leaving China. This requires completing paperwork and having purchases verified by customs officials.
- Instant Refund (New): Introduced in April 2025, this system allows eligible tourists to receive their VAT refund immediately at participating retailers after making a purchase, eliminating the need to wait until departure.
Benefits of the Tax Refund Program
The tax refund program offers several advantages for international shoppers:
- Potential savings of up to 11% on eligible purchases
- Incentive to shop at authorized retailers with quality assurance
- With the new instant refund system, immediate access to refunded amounts for continued spending during your trip
- Streamlined shopping experience for international visitors
Eligibility Requirements
Who Can Claim Tax Refunds?
To be eligible for China’s tax refund program, you must meet the following criteria:
Traveler Eligibility
- Foreign nationals (non-Chinese citizens)
- Residents of Hong Kong, Macau, or Taiwan
- Have stayed in mainland China for less than 183 consecutive days
- Departing China within 90 days of purchase
Required Documents
To claim your tax refund, you’ll need to present the following documents:
- Valid passport or travel document showing your entry date to China
- For Hong Kong and Macau residents: Mainland Travel Permit
- For Taiwan residents: Mainland Travel Permit for Taiwan Residents
- Original VAT invoices (fapiao) for eligible purchases
- Completed tax refund application form (provided by the retailer)
- The purchased items (which must be unused and in their original packaging)
Eligible Purchases
Not all purchases qualify for tax refunds. Here’s what you need to know about eligible goods:
Eligible Items
Ineligible Items
Purchase Requirements
To qualify for a tax refund, your purchases must meet these conditions:
- Minimum purchase amount of ¥200 (approximately $28 USD) from the same tax refund shop on the same day
- Purchases must be made at designated tax refund shops displaying the “Tax Refund for Foreign Tourists” logo
- Items must be taken out of China within 90 days of purchase
- Goods must remain unused and in their original packaging until after customs verification
Tax Refund Process
China offers two different tax refund processes: the traditional departure refund and the new instant refund system. Here’s how each works:
Traditional Departure Refund
New Instant Refund System
Refund Calculation
The refund amount is calculated based on the following formula:
VAT Refundable Amount
Sales invoice amount (including VAT) × Refund rate
- For items with 13% VAT: Refund rate is 11%
- For items with 9% VAT: Refund rate is 8%
Actual Refund Amount
VAT refundable amount − Service fee (2% of refundable amount)
Example Calculation
For a purchase of ¥10,000 with 13% VAT:
- VAT refundable: ¥10,000 × 11% = ¥1,100
- Service fee: ¥1,100 × 2% = ¥22
- Actual refund: ¥1,100 − ¥22 = ¥1,078
Refund Methods
Tax refunds can be issued through several methods:
Cash (RMB)
Available for refunds under ¥20,000. Immediate payment at refund counters.
Credit Card
Refund credited to your card. Processing time: 2-6 business days.
Bank Transfer
Required for refunds over ¥20,000. Processing time: 7-14 business days.
Tax Refund Locations & Special Programs
Major Tax Refund Cities
While the tax refund program is available nationwide, these major cities offer the most comprehensive tax refund infrastructure:
Beijing
Shanghai
Guangzhou
Shenzhen
Hainan Island
Xiamen
Special Tax Refund Programs for Cruise Ship Visitors
China has implemented special tax refund policies for international cruise ship visitors, making it easier for them to shop and claim refunds during their short stays in Chinese ports.
Cruise Ship Tax Refund Program
Eligible Ports
As of May 2024, tax refund services are available at 13 cruise ports along China’s coast:
|
Shanghai |
Tianjin |
Dalian |
|
Xiamen |
Guangzhou |
Shenzhen |
|
Sanya |
Lianyungang |
Wenzhou |
|
Qingdao |
Haikou |
Zhoushan |
|
Beihai |
Visa-Free Entry for Cruise Groups
Foreign tourist groups traveling on cruise ships can enjoy visa-free entry for up to 15 days when organized by Chinese travel agencies. This policy makes it easier for cruise passengers to shop and claim tax refunds during their visit.
Simplified Process for Cruise Visitors
Cruise passengers can benefit from simplified tax refund procedures:
- No need for individual arrival or departure cards
- Group name lists are stamped by immigration authorities
- Customs verification can be done at the cruise terminal before re-boarding
- Refund agencies operate counters at major cruise terminals
Hainan’s Special Offshore Duty-Free Policy
Hainan Island offers a unique shopping experience with its offshore duty-free policy, which is separate from the standard tax refund program:
Hainan Offshore Duty-Free Shopping
Key Features
- Higher annual allowance (¥100,000 per person)
- No need for customs verification upon departure
- Available to both international visitors and domestic Chinese tourists
- Option for mail delivery of purchases to mainland China addresses
Major Duty-Free Shopping Centers
- Sanya International Duty-Free Shopping Complex (Haitang Bay)
- Haikou Meilan Airport Duty-Free Shop
- Haikou Downtown Duty-Free Shop
Read also: Hainan Visa-free Entry Policy: Everything you need to know
Evolution of China’s Tax Refund Policy
2015: Initial Implementation
China introduced its first departure tax refund policy, allowing foreign tourists to claim VAT refunds when leaving the country. The system was initially limited to a few pilot cities and had strict requirements.
2019: Expansion Phase
The tax refund rate was adjusted from a flat 11% to a two-tier system: 11% for items with a 13% VAT rate and 8% for items with a 9% VAT rate. More cities and provinces were added to the program.
2023: Post-Pandemic Recovery
Following the COVID-19 pandemic, China began revitalizing its tourism sector by enhancing the tax refund system, including digital application processes and more refund locations.
2024: Digital Transformation
Self-service machines were introduced in major cities like Shanghai, allowing foreign shoppers to submit transaction details for tax refund applications by simply scanning their passport and receipts.
In Shanghai, tax-refund-on-departure sales jumped 120 percent in value during the May Day holiday, and the amount of tax refunded increased 130 percent.
2025: Instant Refund System
In April 2025, China implemented a nationwide instant VAT refund system, transitioning from a refund-upon-departure model to a refund-upon-purchase system. This allows tourists to receive refunds immediately at the point of sale rather than waiting until departure.
The policy change enables eligible foreign visitors to receive VAT refunds instantly at tax-free stores, encouraging immediate reinvestment of refunded amounts into China’s domestic economy.
Integration with Tourism Initiatives
Visa Policy Enhancements
China has expanded its visa-free transit policy to 60 ports, allowing travelers from 54 countries to stay for up to 10 days (240 hours). This complements the tax refund system by making it easier for tourists to shop and claim refunds.
Additionally, China has implemented a visa-free policy for foreign tourist groups entering via cruise ships at all coastal ports, further boosting tourism and shopping opportunities.
International Consumption Centers
China is accelerating the development of international consumption center cities to stimulate inbound spending. Five cities—Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing—are being transformed into major shopping destinations.
These five cities now account for nearly 70% of the country’s departure tax refund stores and more than half of imported consumer goods.
Hainan Free Trade Port
Hainan Island has implemented a special 30-day visa-free policy for tourists from 59 countries and offers enhanced tax refund benefits as part of its development as a free trade port.
The island has become a major destination for tax-free shopping, with dedicated shopping complexes offering a wide range of international luxury brands.
Digital Payment Integration
The tax refund system has been integrated with digital payment platforms like WeChat Pay and Alipay, making it easier for tourists to receive and track their refunds.
Global Blue and other tax refund service providers have developed mobile apps that allow tourists to monitor their refund status in real-time, typically processing refunds within 2-6 working days.
US-China Trade Relations and Tourism
Trade Tensions
An escalating trade war between Washington and Beijing has seen the US president hit Chinese imports to the US with tariffs of 145%. China retaliated with levies of 125% on some US goods.
Impact on Tourism and Retail
The ongoing trade tensions between the US and China have had significant implications for tourism and retail sectors in both countries:
- Decreased bilateral tourism flows due to visa restrictions and political tensions
- Reduced spending by Chinese tourists in the US, with many choosing alternative destinations
- Shift in luxury goods purchasing patterns, with more Chinese consumers shopping domestically
- Increased focus on domestic consumption within China as part of economic resilience strategy
Tax Refund Policy as Economic Strategy
China’s enhanced tax refund system can be viewed as part of a broader economic strategy in response to trade tensions:
Attracting International Visitors
By making shopping more attractive through instant tax refunds, China aims to increase tourism from countries beyond the US, diversifying its tourism market and reducing dependence on US visitors.
Boosting Domestic Consumption
The instant refund system encourages tourists to spend more during their stay, as they can immediately reinvest refunded amounts into additional purchases, stimulating the domestic retail sector.
Enhancing Retail Competitiveness
By streamlining the tax refund process, China makes its retail sector more competitive globally, potentially attracting luxury shoppers who might otherwise purchase in other markets.
Economic Diplomacy
The tax refund policy serves as a form of economic diplomacy, creating positive experiences for international visitors while showcasing China’s modernization and openness.
Future Outlook
Despite ongoing trade tensions, there are signs of potential improvement in US-China relations that could benefit tourism and retail sectors:
"On Saturday, following the first day of talks Trump praised the 'total reset' on the relationship between the two countries. In a social media post, the US president described the talks as being 'very good' and said change had been 'negotiated in a friendly, but constructive, manner'." Source.
If trade relations improve, we could see:
- Expanded cooperation between US and Chinese retail and tourism sectors
- Increased bilateral tourism flows between the US and China
- Greater spending by American tourists in China, taking advantage of the enhanced tax refund system
- Potential harmonization of trade policies that could further facilitate cross-border shopping
Tips & Frequently Asked Questions
Expert Tips for a Smooth Tax Refund Experience
Before Shopping
During Shopping
Before Departure
At Customs & Refund Counter
Global Blue Refund Tracking
If you use Global Blue for your tax refund, you can track the status of your refund through their official website or app. Refunds typically process within 2-6 business days, but if delayed, contact customer service and provide your bank tracking information.
Frequently Asked Questions
Can I claim a tax refund for services like hotel stays or restaurant meals?
No, the tax refund policy only applies to tangible goods purchased from designated tax refund shops. Services such as accommodation, dining, transportation, and entertainment are not eligible for tax refunds.
What happens if I forget to claim my tax refund before leaving China?
Unfortunately, tax refunds must be processed before you leave China. If you forget to complete the customs verification or visit the refund counter before departure, you generally cannot claim the refund retroactively. Some refund agencies may offer limited post-departure services, but these are exceptions rather than the rule.
Can I use the purchased items before claiming the tax refund?
No, the items must remain unused and in their original packaging with tags attached until after customs verification. Using the items before customs inspection may result in your refund claim being rejected.
How long does it take to receive a tax refund via credit card or bank transfer?
Credit card refunds typically take 2-6 business days to appear on your statement, while bank transfers may take 7-14 business days, depending on your bank and country. Processing times may be longer during peak travel seasons or holidays.
Can I combine receipts from different stores to meet the minimum purchase amount?
No, the minimum purchase amount of ¥200 must be reached at a single tax refund shop on the same day. Receipts from different stores cannot be combined to meet this threshold, even if they are part of the same shopping mall or chain.
What if I’m departing China via a land border or cruise port instead of an airport?
Tax refund services are available at major land border crossings (such as Shenzhen-Hong Kong) and cruise ports, but the process may vary slightly. Check in advance whether your departure point offers tax refund services and allow extra time for processing.
What happens if I don’t complete the customs verification after receiving an instant refund?
If you receive an instant refund but fail to complete the customs verification upon departure, the refund agency will charge your pre-authorized credit card for the refund amount plus any applicable fees. This is why a credit card pre-authorization is required for the instant refund system.
Conclusion
Tax Refunds in China for tourists has evolved significantly over the years, culminating in the 2025 implementation of an instant refund policy that allows visitors to receive VAT refunds at the point of purchase. This system not only enhances the shopping experience for international tourists but also serves as a strategic economic tool to boost domestic consumption and retail competitiveness.
Despite ongoing trade tensions with the United States, China continues to develop policies that attract international visitors and encourage spending. The tax refund system, combined with expanded visa-free policies and the development of international consumption centers, demonstrates China’s commitment to opening its retail market to global consumers.
For tourists planning to visit China, understanding the Tax Refunds in China can lead to significant savings on purchases. By following the guidelines outlined in this guide and staying informed about policy updates, visitors can maximize their shopping experience while contributing to the growing retail economy in China.
