China tightens tax regulations on steel exports

China has rolled out stricter tax regulations on goods exports, specifically aiming at closing loopholes in export management and enhancingtax compliance, Mysteel has learned from an official announcement on March 28.

The announcement was jointly issued by five Chinese government departments - the State Taxation Administration, the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, and the State Administration for Market Regulation.

Under the new rules, taxable steel exports will be subject to the same value-added tax (VAT) and consumption tax as if sold domestically, regardless of whether they are exported directly by producers or through third-party agents.

Exporters must verify their tax registration status before customs declaration. For steel shipped via agents, the consignor must obtain an "Entrusted Export Goods Certificate" within the following tax declaration period and submit it to the agent for processing.

Companies with abnormal tax statuses - such as deregistered or unverified entities - must resolve their tax issues before proceeding with export transactions, according to the announcement.

Authorities have also imposed stricter penalties for tax evasion, including falsifying export transactions, underreporting export values, or altering customs declarations. Violators will face penalties under China's tax and customs laws, with severe cases potentially leading to criminal prosecution.

The new policy will directly affect the country's steel export sector, where the tactics of buying export license documentation for customs clearance to evade taxes have been a stubborn headache, resulting in lower steel export prices, tax revenue losses, and increasing concerns among other countries about potential dumping by Chinese suppliers. China's steel exports exceeded 100 million tonnes in 2024, Mysteel Global notes.

This policy underscores China's efforts to enhance tax compliance and stabilize steel export taxation, reinforcing fair trade practices in the global steel market.

Deeper analysis on how the stricter tax regulation will impact Chinese steel exports:

https://www.mysteel.net/market-insights/5081918-feature-how-will-stricter-export-tax-regulations-impact-chinas-stainless-exports-

Written by Adele Pan, panqinjie@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com