27 April 2025 (GMT+8), China has launched a sweeping overhaul of its tourist tax refund system, slashing the minimum purchase threshold to 200 yuan ($28) and introducing instant VAT refunds at checkout counters. The policy, effective immediately, allows foreign visitors to reclaim up to 11% VAT on purchases ranging from luxury goods to niche "Chinese memory" souvenirs like Sichuan pepper-infused hotpot kits and AI-powered calligraphy brushes.

From departure to purchase

Departing from the traditional airport refund model, China now permits “shop-and-receive” refunds at over 23,000 tax-free stores nationwide.

Tourists can now receive VAT refunds instantly via mobile payment methods such as Alipay, with the refund limit increased to 20,000 yuan (approximately $2,800).

Curating “Must-Buy China” 

The government supports tax-free shops across the country in producing products with local characteristics --- increasing the supply of high-quality products such as time-honored products, famous Chinese consumer products, smart products, intangible cultural heritage products, arts and crafts products, geographical indication products, cultural and creative products, famous and high-quality specialty products, and sports equipment, and guiding tourists to purchase them.

While France and Germany still require post-departure validations, China’s reforms align with Asia’s shift toward seamless shopping. Japan recently digitized its tax-free system, while Thailand’s QR-code refunds saw a 45% tourist spending surge in 2024. “This isn’t just about revenue—it’s soft power warfare,” said Dr. Li Wei, a Shanghai-based retail analyst. “Every panda plush sold is a cultural ambassador.”

Tourists can receive tax refunds immediately while shopping, transforming what would otherwise be a time-consuming administrative process into an instant consumer benefit.

“I bought a 1,200 jade necklace and got 132 back immediately — it felt like a Black Friday deal,” said Emma Carter, a British traveler at Beijing’s Sanlitun shopping district. “Now I’m using the cash to book a Yangtze River cruise.”

Instant VAT Refunds FAQs

1. What is the “Instant VAT Refund” policy?

The policy allows non-Chinese residents (including foreigners and compatriots from Hong Kong, Macau, and Taiwan) to receive VAT refunds on the spot after purchasing goods at designated stores.

2. Who is eligible?

• Visitors staying in China for ≤183 days (counted from entry date).
• Required documents: Valid passport, tax refund forms (provided by stores), and original purchase invoices.
• Exclusions: Prohibited/restricted items (e.g., weapons, certain cultural relics) and duty-free goods

3. How does it work?

Step 1: Shop at designated stores

• Look for stores with a “Tax-Free” logo or “Instant Refund” signs (e.g., luxury brands, cultural boutiques, or specialty shops).
• Minimum purchase: ¥200 per store per day (previously ¥500)

Step 2: Apply for an instant refund

• Sign a refund agreement and provide a credit card pre-authorization (to secure the refund amount).
• Receive prepaid cash (equal to the refund) immediately. Example: Buy a ¥10,000 item → Get ¥900 (9% refund rate, minus fees)

Step 3: Departure verification

• Depart within 21 days of purchase via designated ports (e.g., major airports).
• Present goods (in original packaging) and documents to customs.
• If approved, your credit card pre-authorization is lifted; if not, the prepaid cash is deducted

4. What’s the refund rate?

• Standard rate: 9% of the item’s VAT-inclusive price (e.g., ¥1,000 purchase → ¥90 refund).
• Exceptions: Some stores offer higher rates (e.g., up to 11% for luxury goods)

5. Payment methods

• Cash: Up to ¥20,000 per day (doubled from previous limits).
• Digital payments: Alipay, WeChat Pay, or bank transfers.
• Credit cards: Prepaid refunds are secured via pre-authorization

6. Key restrictions

• Goods must be unused and carried in original packaging.
• Refunds are forfeited if you overstay the 21-day departure window or fail customs checks.
• Penalties: Credit card pre-authorization will charge back the prepaid amount + fees

7. Where are “Instant Refund” stores located?

• Major cities: Beijing, Shanghai, Chengdu, Guangzhou, Shenzhen.
• Hotspots: High-end malls (e.g., Beijing SKP, Chengdu IFS), cultural districts (e.g., Shanghai Yuyuan), and airports.
• Chengdu example: 49 instant-refund stores in 2024, with a 400% sales surge

8. How does China’s system compare globally?

• EU/Japan: Require airport processing, longer wait times (45+ minutes).
• China’s edge: Immediate cash access, lower thresholds (¥200 vs. €175 in EU), and integration with tourism perks (e.g., 240-hour visa-free transit)