Owners of export trading companies often hear "13 percent VAT refund" and picture 13 percent of their sales value coming back in cash. When the bank deposit lands smaller, or months pass with no refund at all, the gap looks like a processing error. It usually is not. The refund base for a trading company is not export sales but the purchase price on the VAT special invoice; the refund rate itself is a published rate that varies by product and often sits below the tax rate. The way to check a refund is not to multiply sales by 13 percent but to trace three separate items: the eligible base, the refund rate, and the supporting purchase and refund records.
Why "13 percent of export sales" is the wrong starting point
The phrase "VAT refund" sounds like a percentage of what you sold. For a trading company exporting goods purchased domestically, the refund is not calculated on export sales at all. It is calculated on what the company paid to buy those goods, as shown on the purchase VAT special invoice.
An assumed example, describing no real business, makes the difference visible. A trading company exports goods with an invoice value of one million RMB. The same goods were bought domestically for 700,000 RMB plus 91,000 RMB of input VAT at 13 percent. The eligible base is the purchase amount of 700,000 RMB, not the one million RMB export sale. That is the effect of section IV(1)(7) of the MOF and STA Announcement No. 11 of 2026, which sets the refund base for ordinary trading-company exports under the exemption-refund method as the amount on the purchase VAT special invoice or customs import VAT payment certificate.
The logic underneath is straightforward. A trading company does not produce the goods and therefore adds no manufacturing value. Its VAT refund is meant to return the tax embedded in what it bought, not to subsidise the selling price. If refunds were based on the export sales value, a company could inflate the invoice price and claim a larger refund than the tax it ever paid on the purchase.
check the purchase invoice, not the sales contract.
Which refund method applies and what it changes
Chinese export VAT rules draw a line between two groups: ordinary trading companies and ordinary manufacturers. Each group follows a different method, and mixing the two up produces a completely wrong expectation of the refund.
For a trading company, the method is exemption and refund. VAT on the export sale is exempt, and the input VAT paid on the domestic purchase is refunded. The refund amount is the eligible base times the applicable refund rate, per section V(2) of Announcement No. 11 of 2026. Section III provides the product-by-product published refund rates and the dates they apply.
For a manufacturer, the method is exemption, credit and refund. The export sale is exempt, the input VAT on domestic purchases can be credited against output VAT on domestic sales, and any remaining excess credit may be refunded. The mechanism involves a ceiling: the exemption-credit-refund ceiling is the FOB value of the export converted to RMB, times the refund rate, less any applicable adjustments for exempted materials used in production, as set out in sections IV(1)(1) and V(1) of Announcement No. 11 of 2026. The cash refund is the lower of the ending excess input VAT credit and that ceiling.
The eligible base: purchase invoice amount, not export sales
For the trading company, the eligible base is the amount stated on the purchase VAT special invoice. If the goods were imported rather than bought domestically, the base is the taxable value on the customs import VAT payment certificate. The export sales figure appears nowhere in this calculation.
A worked example shows the arithmetic.
All figures and product rates below are assumed for illustration and describe no real business. Assume a trading company buys goods domestically for 650,000 RMB. The VAT on the purchase is 13 percent, so the input VAT is 84,500 RMB, making the tax-inclusive purchase price 734,500 RMB. The goods are then exported. The export contract is for 950,000 RMB FOB. The product in question is assumed to have an applicable export refund rate of 13 percent.
The eligible base is the 650,000 RMB net purchase amount, not the 950,000 RMB export price. The refund calculation is:
650,000 RMB × 13 percent = 84,500 RMB.
That result equals the input VAT the company paid on purchase, and is the calculated refund, subject to eligibility and verification. The export value of 950,000 RMB never enters the calculation.
Now suppose the published refund rate for that product is 9 percent instead of 13 percent. The calculation becomes:
650,000 RMB × 9 percent = 58,500 RMB.
The difference between the refund rate and the input tax rate is 13 percent minus 9 percent, that is 4 percent. Applied to the purchase base, that is 26,000 RMB. That amount was never refundable and, per section V(3) of Announcement No. 11 of 2026 where the refund rate is lower than the applicable tax rate, the difference is assigned to the export cost. The company's true cost of the goods goes up by that amount, which then has to be reflected in the product's pricing or margin analysis. The input VAT credit after the refund is nil, because the entire 84,500 RMB of credit was used either for the refund (58,500 RMB) or written off to cost (26,000 RMB).
Now add a second product to the same company. Product A is bought for 400,000 RMB with a 13 percent refund rate. Product B is bought for 200,000 RMB with a 9 percent refund rate. Refund A is 52,000 RMB. Refund B is 18,000 RMB. Total cash refund is 70,000 RMB. The weighted average refund as a percentage of the combined purchase base of 600,000 RMB is 11.67 percent, and as a percentage of an assumed combined export value of 900,000 RMB it is only 7.78 percent. Neither number equals 13 percent, and neither should be used as a planning figure for next quarter.
Section IX(4) of the announcement requires that export goods purchase amounts and their input VAT be accounted for separately. A company that does not keep that separation cannot determine the eligible base reliably and will have trouble supporting the figures in a refund application.
What the 13 percent assumption actually is
The 13 percent figure is an illustration, not a universal export refund rate.
Section III of Announcement No. 11 of 2026 provides for rates published in the refund-rate database and the applicable dates. The rate for each product must be verified there.
Two further conditions matter.
Where goods are purchased from small-scale taxpayers or under simplified taxation, the VAT special invoice will show a tax amount calculated at the collection rate. In that case, per section III, the refund rate applied is the lower of the special invoice tax rate or the export refund rate for the product. A company buying from a small-scale supplier and expecting the full 13 percent refund rate will be disappointed: even if the product's published refund rate is 13 percent, the invoice carried a lower rate of input VAT, so that is the ceiling of what can be refunded.
Where a company exports goods carrying different refund rates, those goods must be declared and accounted for separately. Failing to separate the declarations or accounts, or being unable to distinguish the goods, leads to the lower refund rate under section III.
Where the inputs come from and where the traps hide
Every figure in the refund calculation traces to a document the company already holds. Pull the records below into a single folder before attempting to review a refund.
| Input | Source document | What to verify |
|---|---|---|
| Export sales value (manufacturer) | Export declaration form, customs | FOB value in foreign currency, conversion rate applied, export date |
| Export sales value (trader) | Not used in trader refund calculation | Verify it is excluded from the base |
| Purchase amount (trader) | Purchase VAT special invoice | Net amount, tax rate, supplier status (general vs small-scale taxpayer) |
| Refund rate | STA export refund-rate database | Confirm the rate matches the HS code and the applicable date |
| Ending excess input VAT credit (manufacturer) | VAT return for the filing period | Compare with the exemption-credit-refund ceiling |
| Exempted materials adjustment (manufacturer) | Purchase records of exempted imported or domestic materials | Verify the adjustment is permitted and correctly calculated |
The traps sit in four places. First, the export declaration shows FOB value, but the trader's refund base is not on that document at all; it is on the purchase invoice. Second, the refund rate is not on any company document; it is in the published product list, and using the VAT rate of 13 percent without checking the product's published refund rate is the most common error. Third, the purchase invoice may be from a small-scale taxpayer showing a lower collection rate, which caps the refund far below what the product's published rate would suggest. Fourth, the manufacturer's ending excess input VAT credit must be compared with its exemption-credit-refund ceiling.
Where the calculation goes wrong: four mistakes to audit
Audit your own refund expectations against these four failures. Each one produces a specific distortion.
Mistake one: using export sales as the base for a trading company refund. Effect: the refund is overstated by the ratio of export value to purchase value. If export sales are 950,000 RMB and the purchase was 650,000 RMB, using the export figure inflates the refund by roughly 46 percent before the refund rate is even applied. How to spot it: look at the refund application form and check which number sits in the base field. It should match the net amount on the corresponding purchase VAT special invoice, not the amount on the export contract or commercial invoice.
Mistake two: applying the VAT rate (13 percent) instead of the published refund rate. Effect: the refund is overstated by the difference between the two rates multiplied by the purchase base. A product with a 9 percent refund rate and a 650,000 RMB purchase base produces an overstatement of 26,000 RMB. How to spot it: find the HS code on the export declaration, look up the published refund rate in the STA export refund-rate database, and confirm the applicable date covers the export period. Do not accept "everyone uses 13 percent" as a substitute.
Mistake three: ignoring small-scale taxpayer or simplified taxation purchases. Effect: the refund is overstated because the invoice carries a lower collection rate than the product's published refund rate. A 650,000 RMB purchase from a small-scale taxpayer invoiced at 3 percent carries 19,500 RMB of input VAT. Even if the product's published refund rate is 13 percent, the cash refund cannot exceed 19,500 RMB, leaving a 65,000 RMB shortfall against the naive expectation. How to spot it: examine the tax rate printed on each purchase VAT special invoice. Verify the supplier's status and applicable taxation method; the printed rate alone does not establish taxpayer status.
Mistake four: ignoring the VAT return credit position when planning cash flow. Effect: the refund expectation is met on paper but not in cash because the company does not hold enough excess input VAT credit. In an assumed illustration, a manufacturer with a ceiling of 80,000 RMB and ending excess credit of 21,000 RMB calculates a refund of 21,000 RMB. How to spot it: before filing a refund, run the VAT return calculation. For a manufacturer, compare the ending excess input VAT credit with the ceiling and use the lower amount.
Section IX(4) of the announcement requires that export-goods purchase amounts and input VAT be separately recorded. A company that cannot produce that separation for a specific export shipment cannot substantiate its refund application. That is not a tax authority being difficult; that is the minimum evidence the rule demands.
What the refund actually means for your pricing
The refund is not found money. It returns input VAT the company paid, and where the refund rate is lower than the tax rate, the shortfall becomes an export cost. Section V(3) of Announcement No. 11 of 2026 assigns that difference to the export cost of the goods.
A trading company should therefore know its effective net VAT position per product before quoting an export price. Take the second example above: a product bought for 650,000 RMB with a 13 percent refund rate yields a full recovery of the 84,500 RMB input VAT. That product carries no VAT cost. A different product bought for 650,000 RMB with a 9 percent refund rate yields only 58,500 RMB back; the 26,000 RMB difference is a real cost of exporting that product, and it needs to be embedded in the FOB price or the margin is overstated.
The company that computes this per product and per period is pricing accurately. The company that assumes 13 percent of everything is planning on a fiction.
What Caigeek does with the refund problem
Caigeek takes in the purchase VAT special invoices, the customs export declarations, the VAT returns and the published refund-rate list for the products the business trades in, and returns a per-shipment reconciliation of eligible base, refund rate, the relevant refund method and calculated refund. The output is a schedule showing which product carries what net VAT cost, so an owner sees the effective margin after the refund shortfall rather than before it. Caigeek also ties the VAT position back to the cash account, so a calculated refund is tracked separately from actual bank receipt.
What to do first this week
Pull the last completed quarter's export declarations and match every shipment to its purchase VAT special invoice. For each shipment, write down three numbers: the net purchase amount on the invoice, the tax rate printed on that invoice, and the published refund rate for the product's HS code under the STA export refund-rate database. Manufacturers must also compare their VAT return's ending excess input VAT credit with the exemption-credit-refund ceiling. Compare the refund you expected with the refund those three numbers justify. Where the gap is large, identify which of the four mistakes above caused it, and correct the process before the next filing rather than after the next shortfall.
Sources
Ministry of Finance and State Taxation Administration, Announcement No. 11 of 2026, sections III, IV(1)(1), IV(1)(7), V(1), V(2), V(3), IX(4). https://shanghai.chinatax.gov.cn/zzzb/zcwj/202602/t479284.html