5.4.1.2 The tax refund system for export出口退税制度
The tax refund for export is the money refunded by the tax authority to exporters for the value-added tax(VAT)they have paid in the production and distribution process.To ensure fair competition,importing countries generally require imports be subject to the same tax rate as domestically-produced goods,which means,whether or not the goods have been taxed by the exporting country,the importing country shall still tax them.Consequently,the main purpose of an exporting country’s tax refund policy for export is to avoid double taxation on exports and to enhance a nation’s competitiveness in foreign markets.The refund rate varies by product and may be adjusted by the government.According to WTO rules,this practice is not considered a subsidy as long as the amount of the refund does not exceed that of the tax paid.A tax refund effectively lowers an exporter’s cost for export.