From 2026, export tax rebates for photovoltaic, battery, and other products will be completely cancelled. Adjustments will also be made for chemical raw materials, ceramics, and glass products. This presents a new round of challenges and opportunities for China's foreign trade export industry!
On the evening of January 8th, the Ministry of Finance and the State Taxation Administration of China announced that, starting April 1, 2026, export tax rebates for photovoltaic and other products will be cancelled. From April 1, 2026 to December 31, 2026, the export tax rebate rate for battery products will be reduced from 9% to 6%; from January 1, 2027, export tax rebates for battery products will be cancelled. It is worth noting that, in terms of the scope of implementation, the list of products affected by the tax rebate policy adjustment shows that, in addition to photovoltaic and battery-related products, it also includes chemical raw materials and products (basic chemical raw materials, organophosphorus compounds, etc.), PVC and polymer plastics, kitchen utensils, ceramic products, organosilicon, cement, glass products, and other related products.
This adjustment to export tax rebates affects a wide range of industries and products. In response to the implementation of the new policy, here are some suggestions for businesses:
1. Cost Sharing and Pricing Strategy Adjustment: Businesses should proactively communicate with overseas customers to negotiate cost sharing, such as by renegotiating prices or adjusting payment terms, to avoid order loss. Simultaneously, optimize pricing models to take into account the reduced tax rebate, ensuring that quotations cover the increased tax burden (e.g., VAT calculated at FOB price) while maintaining market competitiveness.
2. Export Model and Product Structure Optimization: To mitigate the impact of the tax rebate policy, businesses can explore the following approaches:
a. Shifting Export Model: Shifting from traditional general trade exports to processing trade or import processing to avoid VAT taxation risks.
b. Product Upgrading: Shifting from exporting primary glass products to high value-added glass products, such as functional glass or customized packaging, to enhance bargaining power and market adaptability.
3. Strengthening Financial and Tax Compliance and Internal Management: Enterprises need to ensure that their financial and tax processing complies with policy requirements. For example, they must differentiate between the VAT calculation methods for general taxpayers and small-scale taxpayers, and accurately declare the amount of tax that cannot be exempted or deducted in the current period. Simultaneously, they should utilize digital tools (such as export tax refund management systems) to improve compliance efficiency and reduce risks.
4. Market Diversification and Long-Term Strategic Adjustment: Faced with domestic overcapacity pressures, enterprises should accelerate industrial restructuring, such as expanding into domestic or emerging overseas markets to reduce reliance on a single export market. In the long term, they should enhance their core competitiveness through technological innovation and green transformation to adapt to policy guidance.
