The “A” Shanghai foreign company has been engaged in overseas businesses for many years, it main task has been for the parent company to purchase and export goods from nationals to European market. Influenced by the COVID-19 and Russian-Ukrainian war, the orders which have come from Europe headquarter of this foreign company has been nearly all cancelled. So the A foreign company could not operate any more, the headquarter only has decided to deregister company and dismiss all staff. In order to save costs and save farther business money, the company has finished all deregister procedures as fast as it could. But after the company has logged off licenses and accounts for less than one month, it has received the information of the original China accounting banks, there has been an export tax refund about RMB 300,000 that transferred to the “A” foreign company that hasn’t receipted. Later, although the A’s headquarter has communicated and coordinated with banks for many times, it hasn’t received refunds as it has all formally deregistered. In the end, the A foreign company has had to give up this refunds.

Dongjin Remind:

Because there is a long time for export tax refunds from application to actually arrived, if enterprises cannot do an information-sharing and co-ordination job, so when they deregister, they often neglect refund applications or refund receptions. Further, they may lose the rights that they may have and cause unnecessary losses.

Dongjin hereby kindly reminds, supposing that enterprises involve export businesses, before it logs off, self-check must be needed firstly. To make sure whether there exist applied export tax refunds or have been applied but not received refunds.

Mike Chang

Partner

mikechang@shanghaiinvest.com