Classified Management to Deepen Reform and New Measures to Boost Foreign Trade - SAT Publishes Revised Measures for Classified Management of Enterprises Eligible for Export Tax Refund (Exemption)

Date: 2016/10/12 14:18:58 Views：

To implement the Program for Deepening the Reform of State and Local Tax Administration System and the Opinions of the State Council on Boosting Stability of Foreign Trade, further optimize the management of export tax refunds, make better use of the role of export tax refunds in supporting foreign trade development, and push forward the social credit system construction, the State Administration of Taxation (SAT) recently published the revised Measures for Classified Management of Enterprises Eligible for Export Tax Refund (Exemption) (New Measures), effective September 1, for the purpose of differentiated management of exporters. According to some experts and government leaders, the New Measures, following the principles of controllable risks, combination of delegation, regulation and services, and convenience for compliance and tax processing under the spirit of deepening the reform in an all-round way, advocates differentiated management of export companies, which will make export tax refund management more relevant and effective.

Classifying exporters into four categories using rigid levers

The New Measures further refines the classification standards for exporters eligible for export tax refunds (exemption), classifying them into four categories using levers such as tax credit, tax compliance, and net assets, for the purposes of differentiated management and services to ramp up management efficiency, accelerate refunding and make use of the role of refunding in fueling foreign trade.

According to Li Wanfu, director of SAT Taxation Science Institute, the New Measures distinguishes productive companies, foreign trade companies and comprehensive foreign trade service providers based on the business forms of foreign trade, and sets the assessment criteria for class-A companies in each type, making classification criteria more relevant. 

Dynamic and timely adjustment of ratings

According to the New Measures, exporter classification will be conducted once a year and completed within one month after their tax credit is rated. State tax authorities that are responsible for classifying exporters shall notify the exporters of the outcomes within 15 working days after the classification is finished, and publish the lists of class-A and D exporters.

Incentivizing the creditworthy while punishing the discredited

According to Professor Hu Yijian from Shanghai University of Finance and Economics, state tax authorities have introduced different management and service measures for exporters in different classes, further highlighting joint incentives for creditworthy companies and joint punishments for discredited ones.

For example, in assessing class-A enterprises, the enterprise' classification with Customs and foreign exchange authorities is also taken into consideration as assessment indicators, in addition to the tax credit standing, thus creating a favorable environment in which those complying with laws will encounter no difficulties. Further, enterprises that are on the list of joint punishments are identified and directly rated as class-D exporters, to ensure discredited enterprises are constrained everywhere.

According to some experts and scholars, the New Measures maximizes service resources for class-A exporters, shortening processing time and simplifying processing procedures, so as motivate these exporters, make use of their driving role, and ultimately promote stability and boom of foreign trade.

Source: General Office of the State Administration of Taxation