BEIJING: Ministry of Finance has announced to increase the number of items that can be bought tax-free from Hainan. Now 17 consumer goods would be added to China’s Tax-Free Shopping Incentive.
Last month, the Ministry announced that Chinese provinces would soon be allowed to offer value-added tax (VAT) refunds to tourists. A number of provinces have expressed interest in launching similar initiatives, including Shanghai and Guangzhou.
The Government had announced that there would be changes to the arrangements, but, in essence, the schemes for other provinces would be based on the framework developed under the pilot in Hainan. Currently just 21 items are entitled to refunds, but the Chinese Government had said in January that it would expand on this list. In addition, the minimum spend threshold will be lowered to CNY500 (USD80).
The latest decision from the Ministry will expand the number of goods covered by the arrangement in Hainan to include: infant formula milk powder, coffee, health food, home air purifiers, home medical equipment, and 17 other consumer goods. Quantitative restrictions will be removed for purchases of perfumes, cosmetics, watches, apparel, and small leather goods, among others.
The change was announced in People’s Republic of China Ministry of Finance Bulletin No. 8, 2015, which will be effective from March 20, 2015.
