Change in VAT refund for imported goods that are re-exported as returns

“Based on the above provisions, the VAT export refund mechanism does not apply to cases where goods are imported and subsequently exported to another country. Accordingly, for goods that are imported and then exported as returns to foreign vendors, where the export customs declaration is registered from 01 July 2025 onwards, overpaid VAT previously paid shall not be eligible for repayment.”

Based on our observations, as of now, regional Customs Sub-departments have ceased processing the repayment of overpaid VAT in respect of VAT already paid on imported goods that are re-exported and returned to overseas suppliers, where the export customs declarations are registered from 01 July 2025 onwards.

From another perspective, as the returned goods are no longer used for production or business activities, enterprises are no longer entitled to continue claiming input VAT credits on such goods, or they are even not allowed to record such amount as a deductible expense for Corporate Income Tax (CIT) purposes.

Read more on Forvis Mazars's opinions in the Alerts below.

Recommendation

Enterprises should review the relevant regulations carefully and seek clarification from the competent authorities to determine the appropriate treatment for their specific situations.

Please refer to the full updates in the Download section below.

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