Cup Makers (Exemption, Credit & Refund) vs. Trading Companies (Exemption & Refund) – What's the Diff in Tax Rebate Filing? (Part 1)
Every cup holds a story; every life deserves warmth. Hello everyone, this is "Dong Dong's Cup Talk".I have just shared about export tax rebate applications for cup manufacturers and foreign trade traders. https://www.umbottle.com/ProductsDetail-VB-10532.html I’d like to strike while the iron is hot and share everything I know in one go while I’m still in this sharing mood.
Under the new official policy effective January 1, 2026, document-buying exports for cup exporters will become far more difficult. Many cup exporters, especially business owners, may ask: how else can we make profits without this practice? The current foreign trade environment is tough. The RMB is appreciating, and profit margins keep shrinking. https://www.umbottle.com/ProductsDetail-VB-10532.html If we have to follow formal customs declaration rules, file VAT returns and are unable to secure tax rebates, we would be losing money on every order. So this sharing is especially relevant for friends facing these concerns.
Core Difference in Filing Sequence (the most common pitfall in actual operations)
Cup Manufacturers (Exemption, Credit & Refund / ECR)
Manufacturers must complete the current-period VAT return filing first before submitting the ECR application. This sequence cannot be reversed.
Factories operate both domestic sales and export businesses. Input VAT from raw materials is collectively confirmed for deduction. Input tax is first used to offset output VAT generated from domestic sales. https://www.umbottle.com/ProductsDetail-VB-10532.html Any remaining excess input tax credit after offsetting will then be calculated as the refundable amount. The tax authority will reject your ECR submission if your VAT return has not yet been filed.
Foreign Trade Trading Companies (Exemption & Refund)
Traders do not need to file the VAT return beforehand. Their input invoices are separately marked as Rebate Checked, and these invoices are not used to offset output VAT.
Trading companies only purchase finished cups for export with no production processes involved. https://www.umbottle.com/ProductsDetail-VB-10532.html Their VAT special invoices are solely for rebate calculation and will not be deducted against domestic sales tax liabilities. VAT filing and tax rebate filing are two independent procedures. There is no mandatory rule requiring VAT filing before rebate submission.
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