This service is a core module of China Compliance Risk Review™, designed to support the overall compliance infrastructure for China operations.

Assessing Whether Your China Compliance Position Is Defensible When Questioned

Consistency Risk Assessment for Export VAT Refunds in China

The real risk of export VAT refunds is not eligibility, but long-term consistency

China’s export VAT refund system is rule-based and well defined. However, in practice, compliance risks rarely arise from misunderstanding the policy itself.

Instead, they stem from small but persistent inconsistencies in day-to-day operations, including:

• Discrepancies among VAT invoices, customs declarations, and collection records

• Variations in product descriptions, specifications, quantities, or values

• Inconsistent practices across personnel or reporting periods

• Reliance on ad-hoc explanations rather than stable operating rules

While individual discrepancies may initially lead only to delayed refunds or requests for clarification, once flagged by the system or regulators, they often escalate into structural refund compliance risks.

The Export VAT Refund Consistency Risk Review is designed for this high-frequency, low-tolerance, system-driven risk environment.

What Is Export VAT Refund Consistency Risk

Export VAT refund consistency risk typically includes:

• Inconsistencies among VAT invoices, customs declarations, and collection records

• Differences in product names, specifications, quantities, units, or amounts

• Business substance being reasonable, but formal consistency being insufficient

• Practices based on experience rather than standardized, repeatable rules

Under current regulatory systems, even reasonable discrepancies may be automatically flagged as anomalies.

Key Areas Covered in the Review

1 | Foundational Consistency Across the “Three Documents”

• Whether invoices, customs declarations, and collection records can be matched item by item

• Whether descriptions, quantities, and amounts are system-compatible

• Whether manual explanations are required to reconcile differences

2 | Stability and Repeatability of Operating Rules

• Whether clear and unified operating rules exist

• Whether consistent practices are applied across personnel and batches

• Whether outcomes depend on ad-hoc adjustments rather than stable processes

3 | Risk Exposure from System Controls and Manual Reviews

• Which inconsistencies are most likely to trigger system alerts

• Which practices are least likely to be accepted in manual reviews

• Whether identified issues could lead to broader scrutiny once selected

4 | Accumulated Historical Risk and Forward-Looking Impact

• Whether historical inconsistencies remain unresolved

• Whether past practices may affect future refund eligibility

• Whether the enterprise may be subject to increased monitoring frequency

Typical Risk Scenarios

• Refund applications flagged by the system for inconsistencies

• Similar transactions approved in one period but rejected in another

• Minor product description differences that cannot be amended

• Exchange rate differences or bank fees causing amount mismatches

• Business explanations accepted internally but rejected by the system or tax authorities

In such cases, the issue is rarely the transaction itself, but whether consistency meets system acceptance standards.

What This Review Does Not Include

To avoid misunderstanding, this service does not include:

• Export VAT refund agency or filing services

• Coordination to amend invoices or customs declarations

•  Guarantees of refund approval

• High-risk, after-the-fact remediation measures

This is a consistency risk assessment and foundational compliance review, not a refund execution service.

Deliverables

Clients will receive:

• An export VAT refund consistency risk rating (Low / Medium / High)

• Analysis of key inconsistency drivers and exposure points

• Differentiation between system-unacceptable issues and manageable risks

• An executive-level refund compliance explanation summary

Who This Review Is Designed For

• Export-oriented enterprises applying for VAT refunds

• Companies experiencing refund delays or rejections

• Businesses with growing product complexity or transaction volume

• Enterprises seeking to assess refund risks before formal applications

Position Within the Service Framework

This review typically serves as:

• A specialized module within China Compliance Risk Review™

• A foundational compliance layer supporting China Entity Foundation™

• A decision-support input for future refund advisory or operational adjustments

The core risk of export VAT refunds is not whether the business is legitimate,but whether long-term consistency can be maintained and accepted by the system.

Contact Us

We do not make decisions for you; we only help you clarify facts and risks.

Phone : 400 800 7472

Email : info@rtfcpa.com