The State Administration of Taxation and the Ministry of Foreign Affairs jointly issued a circular to declare foreign embassies in China and their personnel eligible for tax refunds, and specify the scope, process, and approval procedures.
Compared with previous regulations, the circular expands the tax refund scope to include some living expenses and office services.
After the reform to replace the business tax with a value-added tax, the tax refund scope was extended, according to an official from the administration.
The circular unifies the calculation method for tax refunds for water, electricity, gas, hot water, heating, gasoline and diesel for personal use, and other goods and services.
According to the circular, sales amount (plus tax) for goods and services, excluding vehicles, declared for tax refunds should not exceed 120,000 yuan ($17,987) per person each year, an increase that will both benefit embassies and their staff, and curb abuse of refund policies.
The circular also clarifies other related matters concerning tax refunds, such as refund time limits and declaration deadlines.