Chinese authorities have introduced new export tax regulations aimed at optimizing export services and improving tax compliance. These changes will particularly impact steel exports from Chinese traders who were previously evading VAT, allowing them to offer unusually low prices to overseas clients.
The new regulations, issued by China’s State Administration of Taxation, the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, and the State Administration for Market Regulation, now require that all exported goods include value-added tax (VAT). Exporters must pay the same VAT and consumption tax as applied in the domestic market when selling goods abroad. Additionally, exporters are required to verify their tax registration status before making customs declarations.
Penalties will be imposed on exporters involved in tax evasion or fraudulent transactions.
Following the announcement, several Chinese traders, particularly those offering non-VAT steel such as HRC, have suspended their offers. Some traders are skeptical about the possibility of resuming non-VAT steel exports, which would create a more level playing field.