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Heavy hit! "Buy and export" will be completely ended? Five ministries and commissions jointly issued a document | Maritime export logistics
Apr 01,2025
On the evening of March 28, the five departments of the State Taxation Administration, the Ministry of Finance, the Commerce Ministry, the General Administration of Customs and the State Administration of Market Supervision and Administration jointly issued a bulletin on matters related to the standard management of export of goods subject to domestic chain tax (hereinafter referred to as the bulletin).
The blockbuster news marks that the state's crackdown on "buy-for-export" tax evasion has risen from fragmented actions in the past to the level of laws and regulations, which foreshadows a fundamental curb on buy-for-exports.
Since 2021, the state has completely eliminated the export tax refund policy for all types of steel, resulting in exporters no longer having to rely on invoices and export documents issued upstream to apply for tax refunds. At the same time, foreign shippers did not require invoices from domestic exporters, which led to a large accumulation of "billless" goods in the hands of domestic exporters.
These "billless" goods provide exporters with new avenues for profit: they are resold to downstream users who "only need bills and no actual goods." Downstream users purchase these VAT invoices at a low price and deduct them as input tax, thereby obtaining tax relief without actually purchasing steel.
In this chain, exporters profit by selling tax bills, downstream users reduce their tax burden by purchasing tax bills and foreign shippers buy goods at a lower price, but the only thing that is hurt is the country's tax revenue.
In addition, this behavior has seriously damaged the image of China's steel exports and provided a "chokehold" for foreign countries to launch anti-dumping investigations into Chinese steel exports. To circumvent censorship, many companies adopt a strategy of registering foreign trade companies quickly and cancelling their transactions immediately, making tax evasion more hidden and difficult to crack down on.
The notice clearly states that:
1. Taxpayers, customs reporting enterprises, customs personnel and other entities exporting dutiable goods and related personnel shall not forge, alter, buy or sell customs declarations, and shall not fabricate export operations, misrepresent the value of the goods, or underreport the value of goods.
2. The taxpayer must complete the confirmation of the tax registration information before declaring the export of the taxable goods to the customs. Taxpayers who have not completed the registration or who have a tax unusual situation need to deal with the relevant tax-related matters first.
3. A taxpayer exporting dutiable goods must first apply to the taxation department for tax cancellation and apply for registration of withdrawal on the strength of the tax clearance certificate before applying for cancellation.
The five departments of the state jointly issued this announcement, aimed at curbing low-price export tax evasion at an institutional level, safeguarding the order of foreign trade, and promoting high-quality export development. The implementation of this policy will have a profound impact on the foreign trade industry and bring an end to the grey area of "buy-for-export."
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