Chinese authorities have announced an expansion of instant tax refunds on purchases made by overseas visitors, in a decision widely viewed as a bid by China to bump up inbound travel and spending.
Under the new ‘Buy Now, Refund Now’ regime, more foreign shoppers will be able to claim instant reimbursements of the value-added tax on their purchases. Instead of having to wait until they depart the country, tourists who have given credit card pre-authorisation will receive the tax rebate immediately at the point of purchase, meaning they will have more funds to continue shopping and spending. Customs officials will still inspect goods at the border and, if satisfied, remove the pre-authorisation.
【Buy & Refund Service For Overseas Travelers is now available nationwide in China. Check out the tax refund guide video below ↓↓↓】
— GBA Life Style (@zhengniushi) April 17, 2025
China has updated its tax refund policy for foreign tourists, shifting from a refund-upon-departure model to a refund-upon-purchase model, the… pic.twitter.com/mcQUPtmfMD
Trial scheme boosted sales by 400%
The development comes after pilot schemes in the nation’s major cities of Beijing, Guangdong, Shanghai, Shenzhen, Sichuan, and Zhejiang, which have been “running smoothly” and were “welcomed by the majority of foreign tourists,” according to statement by a representative at the Goods and Services Tax Department. Chengdu Taxation Bureau figures on the Sichuan trial show that in 2024, the measure had effectively boosted spending. Just 12 months after the first eligible shops opened “merchandise sales exceeded 250 million yuan [€29 million], a year-on-year increase of more than 400%.”
Li Xuhong, vice president of the Beijing National Accounting Institute, quoted by the Chinese State Administration of Taxation, says the measure “will help improve Chinese services, create a ‘friendly, efficient and convenient’ tourism environment, further stimulate the consumption of foreign tourists, and provide support for high-quality economic development.”
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— Patrick Zweifel (@PkZweifel) April 17, 2025
Chinese activity in March exceeded expectations, providing strong momentum for the trade war with the US and reducing the urgency for fiscal support
GDP has returned above its pre-pandemic trend with two consecutive quarters of growth above potential: nearly 8% in Q4 2024 and… pic.twitter.com/NDBjyPhL2K
A way to offset US trade tariffs
Analysts suggest the policy is a way for China to offset the potential negative impact on Chinese exports of US President Donald Trump’s trade tariffs. A US tax of 120% will now be applied to Chinese e-commerce, hitting giants such as Aliexpress, Shein, and Temu—firms which have so far all been relying on so-called “de minimis” export shipments (worth less than $800 per package), to flood the US market with over one billion packages of cheap goods in 2023, according to a congressional report. Those goods will now be more expensive, as US importers and consumers suck up the tariffs through higher prices; potentially, Trump hopes, making consumers consider buying American.
We calculated that post Trump “put” today, the tariff mix is actually worse —China exports more consumer goods to US than other countries, so boosting that (to 125%) relative to others will boost the hit to consumption goods. pic.twitter.com/Yw9QIgcXqG
— Anna Wong (@AnnaEconomist) April 9, 2025
Inciting incoming consumers to spend more when they visit, China’s new ‘Buy Now, Refund Now’ tax measure could help mitigate that fall in US demand for its products.
Alongside new Chinese visa-waiver policies, which now offer visa-free travel to 38 nations worldwide, it’s a strategy intended to boost domestic consumption through foreign tourism—a market that China’s National Immigration Administration says doubled in 2024. Conversely, spending by foreign tourists to the US is predicted to decrease by around $20 billion in 2025.
