Export Rebate: The Secret to the Cheaper Made-in-China Product Selling Outside China

It’s widely known that made-in-China products are selling at a cheaper price outside China, not only the OEM articles like Nike, but the China based Lenovo also follow that pricing. There are many reasons contributing to the different price, including pricing strategy, logistic cost, office rent, taxation and even the change or exchange rate. IN this essay, we prefer to discuss the cause of a cheaper price of the same article overseas from the aspect of tax rebate.

I. VAT rebated in export

To take the Nike shoes as the instance, when Nike plants export the shoes, China taxation authority will rebate the paid VAT occurred during the process of production and circulation before the export, and that’s called the “export tax rebate”. So, let’s first take a look at how many taxes shall be paid within Nike shoes’ manufacture and circulation before the export.

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Will International Software Company Benefit from China’s New VAT Policy?

— the interpretation on the preferential policy of value-added tax

Recently, the Notice on the Policy of Value-added Tax of Software Product (the “Policy”) was jointly issued by the Ministry of Finance and the State Administration of Taxation of P.R.C., which shall back cover any VAT after 2011.1.1. The stock market reacts positively to the new policy.

However, as far as Bridge IP Commentary knows,the Policy is just the continuation of the past regulations, which include the Policies for the Development of the Software & Integrated Circuit Industries issued in 2000 (the “Policy in 2000”) and the Notice of Policies for Further Development of the Software and Integrated Circuit Industries released in first half of 2011 (the “Notice”). Even so, the introduction of the Policy once again shows the ambition of China government to boost the software industry. And the following is the interpretation on the Policy from Bridge IP Commentary:

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