What does VAT refund mean?

The scientific name of tax refund is "VAT refund preference", which means that the "input" VAT that cannot be deducted now and can only be deducted in the future will be refunded in full in advance. ?

Since the implementation of the large-scale VAT refund policy on April 1 2022, State Taxation Administration of The People's Republic of China and other six departments have taken action to crack down on illegal and criminal acts of defrauding tax refund, which has effectively ensured the stability of the policy. From April 1 day to July 12, 5,244 enterprises were found to have defrauded or illegally obtained tax refund, and the accumulated tax refund and other tax losses reached 80%.

The so-called tax allowance can be simply understood as the tax allowance when the input tax amount is greater than the output tax amount. Input tax refers to the value-added tax paid by taxpayers when they purchase goods, intangible assets or real estate. Output tax refers to the value-added tax collected at the time of sale. Generally speaking, there are many reasons for the formation of tax exemption, such as concentrated investment and long commodity production cycle. ?

Tax refund is to return the tax amount that has not been deducted at the end of VAT to the taxpayer. The value-added tax adopts the chain deduction mechanism, and the tax payable is the balance of the taxpayer's current output tax after deducting the input tax. Among them, the output tax refers to the value-added tax calculated according to the sales volume and the applicable tax rate; Input tax refers to the value-added tax paid for purchasing raw materials. When the input tax amount is greater than the output tax amount, the input tax amount that is not deducted will form a tax deduction.