China's optimized tax refund policies have significantly enhanced shopping experience for overseas travelers, giving wings to a cross-border travel boom and fueling inbound consumption.
In early April, China's State Taxation Administration rolled out a refund-upon-purchase policy. Under the new policy, foreign visitors can instantly claim value-added tax (VAT) rebates at tax-free stores, enabling them to reuse the refunded amount in real time for further shopping. Previously, VAT rebates were only available for withdrawal upon departure.
The freshly expanded refund-upon-purchase policy, together with a new transit policy that allows citizens from 54 other countries to stay in the country for up to 240 hours without a visa, has attracted more overseas visitors.
"It's just a bit more expensive in Australia, that's why. Plus it's just like convenient for me as I'm traveling back home to Russia. So I've got a one day stopover in Beijing and I'm happy to be here and I can buy. So why not?" said an Australian tourist who was buying at a shopping mall in Beijing.
A manager said that after joining the departure tax refund scheme, his store has seen a significant rise in the number of foreign tourists.
"In May, we processed an average of four to five (refund-upon-purchase) orders a day, with a maximum of 13 orders a day. Sometimes the refunded amount will be used for further spending," said Guo Shaogang, a shop owner at the China World Mall.
On April 27, a new package of measures aimed at further optimizing the departure tax refund policy and boosting inbound spending was announced by the Ministry of Commerce and five other government departments in a joint circular.
The measures include lowering the minimum purchase threshold for tax refunds from 500 yuan (about 69 U.S. dollars) to 200 yuan (27.8 U.S. dollars), effective immediately, and doubling the limit for cash refunds from 10,000 yuan (1,389 U.S. dollars) to 20,000 yuan (2,778 U.S. dollars), expanding the network of participating stores and widening the range of products available. "Shopping in China is different than [from] the other places especially in Dubai or in Europe. You can find the different items even if they look the same, but it's in different quality and different prices. It's very nice. You have a lot of choices here," said a Dubai traveler. When departure tax refund shops are expanding, the number of urban duty-free shops are also on the rise. The first downtown duty-free shop in central China's Hubei Province began trial operations in the provincial capital city of Wuhan on Friday, with a variety of goods available from wine, cosmetics, electronic products and specialty products.
It is located in a luxury shopping mall within Wuhan's core commercial districts, which received over 32 million visits last year and achieved annual sales exceeding 10 billion yuan (about 1.39 billion U.S. dollars).
The duty-free shop's investor and operator, a joint venture company, has secured cross-border direct procurement agreements with over 100 international brands.
Previously, China had already established six downtown duty-free shops in cities of Beijing, Shanghai, Qingdao, Dalian, Xiamen, and Sanya.
"We ensured that the first batch of imported duty-free goods were put into storage at this duty-free shop, covering more than 8,200 items in 28 categories including domestic fashion goods, with a total value of 5.1 million yuan (708,360 U.S. dollars)," said Li Ang, a customs officer in Wuhan.
At major international airports in China, the number and amount of departure tax refund applications have increased significantly.
"From January to April, the Beijing Capital International Airport handled more than 6,000 departure tax refund applications, up about 100 percent year on year. At the same time, the value of departure tax refund applications exceeded 300 million yuan (41.67 million U.S. dollars), a year-on-year increase of 74 percent," said Liu Yang, a customs officer at the airport.
China introduced the departure tax refund policy for overseas travelers in 2015.
Last year, the sales of eligible goods rose 120 percent year on year, while the total amount of tax refunded increased by 130 percent, according to official data.
Inbound tourists spent a total of 94.2 billion U.S. dollars last year, up 77.8 percent from a year earlier.
Last year, China recorded 132 million passenger trips by inbound travelers, a 61 percent year-on-year jump.
China is accelerating the development of international consumption center cities to further stimulate inbound spending. It is working to transform five cities of Shanghai, Beijing, Tianjin, Chongqing and Guangzhou into major shopping centers.
In 2024, the number of inbound foreign travelers to these cities doubled from the previous year.
Together, the cities now account for nearly 70 percent of the country's departure tax refund stores and more than half of imported consumer goods.
In the first four months of this year, the Shanghai Customs reviewed and approved 36,000 departure tax refund applications, a year-on-year increase of 137.4 percent, ranking the first in the country. The top three tax refund commodities were clothing, luggage and jewelry.
From January to April, the number and amount of tax refund applications for overseas tourists handled by the Guangzhou Baiyun Airport Customs soared by 195 percent and 149 percent year on year, respectively, with photographic equipment ranking among the top three tax refund commodities for the first time.
The Chongqing Jiangbei Airport Customs registered a staggering 346 percent increase in tax refund applications from overseas passengers in the January-April period, and the amount meant an increase of 282 percent year on year. Both fashionable items from internationally renowned brands and specialty items from local brands were available, bringing rich and diverse shopping options to inbound travelers.
China's updated tax refund policies spur inbound spending
