China overhauls tourist tax refund system to speed up shopping and cut airport queues
Foreign visitors gain more flexibility with cross-city and delayed verification rules
BEIJING – China is rolling out a significant overhaul of its departure tax refund system, aiming to make shopping for international visitors faster, simpler and more digitally integrated.
The reforms are being introduced in stages throughout 2026 and are positioned as an upgraded “2.0 version” of earlier policy changes introduced in 2025. Officials say the objective is to remove long-standing friction points that have discouraged overseas travellers from reclaiming value-added tax efficiently.
The changes come as China continues to push inbound tourism and consumption, supported by expanded visa-free entry schemes and broader retail participation in refund programmes. Authorities say the new system is designed to support both in-store and online shopping while reducing administrative delays at airports and border checkpoints.
Around 14,000 stores across China now participate in the tax refund scheme, a figure that has quadrupled since the end of 2024.
Faster clearance
From 1 July 2026, China will fully digitise its departure tax refund process, replacing paper-based applications with electronic submission systems shared between customs authorities and refund agencies. This paperless transition is expected to significantly reduce processing times and improve accuracy across major departure hubs.
A key procedural change affects lower-value purchases. For goods under CN¥10,000 (around US$1,470), customs inspections will no longer be mandatory for every claim. Instead, travellers will be subject to random checks, a shift designed to ease congestion at airports while maintaining compliance oversight. Higher-value claims will still undergo full inspection.
The government is also expanding flexibility in how refunds are processed. Travellers using instant refund services can now receive money directly at participating stores by presenting their passport and providing credit card pre-authorisation. The refunded amount is temporarily held and later released once customs verification is completed within 28 days of purchase.
Retail expansion
China’s refund ecosystem is also expanding beyond traditional retail outlets. Beijing has launched its first online departure tax refund store through major e-commerce platforms, including JD.com. The platform allows overseas visitors to purchase eligible goods online and complete refund-linked transactions digitally, marking a shift from purely physical retail participation.
In addition, hotels and hospitality venues are being integrated into the refund network. Select properties in Beijing now offer centralised refund services, enabling travellers to process claims during their stay rather than at airports. This expansion is aimed at creating a seamless shopping experience across accommodation, retail and transport touchpoints.
The range of eligible goods remains broad, including electronics, leather goods, fragrances and cultural products, provided retailers are registered under the scheme. China’s standard VAT rate of 13% continues to underpin the refund value, making higher-ticket purchases particularly attractive for visitors.
Flexibility for visitors
Further reforms are improving mobility for international shoppers. Travellers can now complete their initial purchase in one city, such as Beijing or Shanghai, and finalise customs verification at a different departure point elsewhere in the country. This cross-city flexibility is intended to support multi-destination itineraries and longer stays.
Officials report that inbound consumption is already growing strongly. In 2025, approximately 270,000 overseas visitors applied for tax refunds, a fourfold increase compared with the previous year. During the same period, inbound consumption and travel service exports rose sharply, reflecting stronger international travel demand.
China’s tourism strategy is increasingly focused on convenience, with refund-upon-purchase systems expanding in major shopping districts. Authorities are also deploying self-service machines and digital verification tools in airports and malls to further reduce waiting times.
The reforms come as other major shopping destinations adjust their own tax refund frameworks. Japan is preparing to replace its point-of-sale tax exemption system with a refund-upon-departure model from November 2026. Under the new structure, travellers will pay full prices upfront and reclaim consumption tax at the airport before leaving the country.
While Japan maintains a 10% consumption tax refund rate, the shift marks a move away from instant savings at checkout. China’s current direction, by contrast, is increasingly focused on combining instant refunds, digital processing and cross-city flexibility to encourage higher visitor spending and longer retail engagement across multiple destinations.