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January 14, 2016

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Home » City specials » Chengdu

VAT return scheme takes off at Chengdu

INTERNATIONAL travelers leaving Chengdu will be able to benefit from a tax refund scheme, also known as VAT return, for certain locally purchased goods.

Tax return forms, which are already available at designated shops as of January 1, can be handed in at Shuangliu Airport in Chengdu to claim the tax refund.

Following Shanghai and Beijing, Chengdu is among the second batch of cities implementing the VAT return scheme and is the first inland city in the west. Chengdu hopes that the scheme will help accelerate the progress to become an international mega city.

Chengdu’s goal is to become a “world-renowned” tourist destination.

Chengdu is now the first inland city in the west that has implemented the VAT return policy. Chengdu authorities have said that it is part of a long-term endeavor to hoist its urban influence, re-define its global image and to promote Chengdu’s international reputation.

The scheme, the local government hopes, will help foster domestic brands and have a direct impact on tourist arrival as well as on tourists’ spending. By providing better incentives to shop in Chengdu, the city hopes that it will see an increase in international arrivals at Shuangliu Airport.

Currently, more than 40 million passengers annually travel through the airport, whose passenger throughput ranks No. 4 nationwide. Recently, a direct flight between Chengdu and Paris was launched, bringing the total number of international and domestic routes up to 85. Now the city has connection with 71 overseas transport hubs by air, among which 41 are regular direct flights and cover Asia, North America, Europe, Middle East, Africa and Oceania.

Bilingual signs of “Tax free” have been put in obvious places at the Chengdu Shu Brocade and Embroidery Museum, which is on Caotang Road E, and a popular shopping destination for foreign tourists.

“We received 100,000 visitors annually, and the tax-free policy will further boost sales of the tourism products,” said Zhong Bingzhang, general manager of Chengdu Shu Brocade and Embroidery Co Ltd, the museum’s operator.

Chicony Square is also among the first batch of tax-free shops in Chengdu. About 95 percent of its goods will be labeled as tax-free. Visitors can learn more information about the new tax policy through a video advertisement, and tax refund desks have already been set up.

According to Chen Shian, vice minister of Chengdu Tourism Administration, the city’s tax refund scheme will provide better shopping experience for international visitors and make the international tourist public service system more mature.

Stimulated by the policy, Chen expects more and more overseas travelers to buy goods in Chengdu, which in turn boost the city’s economy, increase the portion of GDP contribution from the service industry and improve Chengdu’s whole tourism industry.

That the policy is implemented smoothly is a crucial step for Chengdu on its path to become China’s first inland free trade zone and into a “shopping paradise with global influence.”

The policy can also help nurture domestic brands and increase sales of Chengdu’s local specialties among overseas buyers. A total of 33 companies are part of the first wave of stores that will provide forms for tax return, including Chengdu IFS, Chengdu Wangfujing Department Store, Renhe Spring Department Store and Chengdu Shu Brocade and Embroidery Co Ltd. The stores cover the city’s major shopping areas and traffic hubs, which are commonly frequented by foreign visitors.

The policy can also entice overseas tourists to buy branded goods special to the region, which in turn can encourage companies to develop more and better tourist products embodying cultural traits of Chengdu.

Bank of China won the public bidding to help implement the tax refund scheme.

The trial in Chengdu is also expected to collect useful experience for China as a whole in providing better tax refund services.

WHAT you need to know

• The tax refund desk is set up near the No. 102 departure gate in the overseas departure zone of terminal 1 at the Shuangliu Airport.

• Beneficiaries of the policy are offshore tourists, namely, foreigners and residents of Hong Kong, Macau and Taiwan who did not stay on the Chinese mainland for more than 183 days.

• Refund items refer to goods bought by offshore tourists themselves at tax-free stores and those that are eligible for tax refund. They exclude:

Items listed on the People’s Republic of China’s Prohibited and Restricted Inbound and Outbound Articles List;

Items enjoying VAT duty-free policy at tax-free stores;

Other items prohibited by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation.

• Conditions for tax refund include:

The consumption of the same offshore tourist at the same designated shop within the same day amounting to a minimum of 500 yuan (US$76.35);

The item hasn’t been used or consumed;

The departure date is within 90 days from the shopping date;

The item will be carried or consigned for shipment by the same person who purchased the item (passport identification upon purchase is necessary).

• According to the pilot policy, the tax refund rate in Chengdu is 11 percent. However, the agency, Bank of China, will charge a 2 percent service fee, so tourists will end up with a return of 9 percent.

A tourist may choose between cash and bank card payment if the refund amount is within 10,000 yuan. When the amount surpasses 10,000 yuan, it will be paid through bank transfer.




 

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