Local Chinese Manufacturer

Background

Our client is a local Chinese manufacturing company located in the greater Beijing area. Their business is doing well but at times the client needs technical services to continue operations.

Issue

As the client needed technical support service for its manufacturing equipment that was not available at this time in the greater Beijing area, the company decided to buy this service from a US company located outside of China.
The Chinese government sets incentives to encourage local companies to purchase advanced technology abroad to support the transfer of technology. That is why local Chinese companies can deduct the VAT for these services or technologies.

Solution

The VAT tax should be deducted, but the client paid the VAT in advance, so they engaged Ecovis Beijing to help them to proceed with the tax refund process. We analysed the case and collected all necessary documents from both the local company and the service provider in order to prepare a VAT refund application for the Chinese tax bureau.

Currently

Due to the complete and diligent refund application provided by Ecovis Beijing, the VAT has now been refunded due to our action. We are still working on the surcharge refund which our client will soon obtain.