China upgrades tax refund policy as Shenzhen promotes local tech

Shenzhen will bring more locally made products, including drones, smartphones, jewelry and smart wearables, into departure tax refund stores as China rolls out a new round of measures aimed at improving shopping convenience for overseas travelers and expanding inbound consumption.

Customers browse electronic products at the Sundan store in the MixC mall, Luohu District. Xinhua

The move comes as China sees growing inbound travel momentum supported by expanded visa-free policies, easier payment services, departure tax refund facilitation and the “Shop in China” campaign.

The Ministry of Commerce and other authorities yesterday issued a notice on further optimizing departure tax refund measures and expanding inbound consumption. Officials described the latest package as the “2.0 version” of China’s departure tax refund policy.

The new policy package includes measures such as wider coverage of tax refund stores, paperless processing, improved refund-upon-purchase services and random inspections for small-value refund applications. Authorities will also encourage more eligible stores to register as departure tax refund stores and support localities in expanding such services in key business districts, tourist attractions, markets and ports with large numbers of overseas travelers.

Vice Commerce Minister Sheng Qiuping said the latest measures focus on making the tax refund process more accessible, faster, more digital and standardized.

Overseas visitors negotiate with a shop owner in Huaqiangbei, Shenzhen’s renowned electronics market. Shenzhen Evening News

According to the Ministry of Commerce, sales involving departure tax refunds nearly doubled in 2025 from a year earlier, while inbound consumption and travel service exports rose nearly 40% and 50%, respectively.

The State Taxation Administration said the number of travelers applying for departure tax refunds increased 367% year on year after China introduced an earlier round of optimized measures in April 2025. Sales of tax-refunded goods and the amount refunded both rose 90%.

Tax authorities have also promoted the refund-upon-purchase model, under which travelers can receive cash refunds on the spot after buying goods instead of waiting until departure procedures are completed.

Beginning July 1, 2026, customs authorities will conduct random physical inspections for tax refund applications involving sales of less than 10,000 yuan (US$1,461), while applications involving 10,000 yuan or more will continue to be inspected individually. Officials said the move is expected to reduce waiting times at ports.

The policy will also allow travelers who receive instant refunds after shopping to complete departure tax refund procedures at ports outside the place of purchase. Travelers using refund-upon-purchase services will have 28 days to leave China and complete the relevant procedures under a standardized nationwide time limit.

Authorities said agencies including Bank of China and Industrial and Commercial Bank of China have developed self-service tax refund machines for use in shopping malls.

China’s five international consumption center cities — Beijing, Shanghai, Guangzhou, Tianjin and Chongqing — accounted for one-third of inbound foreign visits and two-thirds of national departure tax refund sales in 2025, according to the Ministry of Commerce.

Officials said major cities are adapting the policy to local strengths. Beijing plans to expand its tax refund network, while Shanghai will introduce smart verification equipment at its airports. Shenzhen, meanwhile, plans to include more locally made consumer products in tax refund stores as part of the broader national policy rollout.