The export tax rebate rate for solar modules and batteries will be reduced from 13% to 9% in China. This change, which reduces the tax benefit for Chinese exporters, is expected to result in a 4% increase in the FOB (Free On Board) price of the equipment – in this type of freight the buyer assumes the costs and risks of transportation from the moment the goods are shipped.
The new rules apply to lithium-ion batteries (NCM 8507.60.00), photovoltaic cells that are not installed in components or assembled in blocks (NCM 8541.42.00) and photovoltaic cells that are installed in components or assembled in blocks (NCM 8541.43.00). See here the list released by the Chinese government.
The new rules announced by Ministry of Finance and State Administration of Taxation of China last Friday (15) will come into effect from December 1, 2024.
For this purpose, the export date indicated on the customs declaration form for export goods will be taken into account, i.e. the date of shipment of the equipment.
The Chinese government's announcement to raise export taxes comes shortly after the Brazilian government's increase the import tax on photovoltaic modules from 9,6% to 25%. The Brazilian government's measure has been in effect since November 13th.
Official: 25% import tax on solar panels comes into effect
With the announcements from both governments, the increase in the cost of taxes for photovoltaic modules should be at least 29%. Sources consulted by Canal Solar reported that players in the photovoltaic market are aware of the possible impacts on the Brazilian market.
Felipe Santos, DAH Solar’s Regional Director for Latam, commented that some measures are already being taken. “We received the news and immediately began working hard with our customers to minimize the impacts. The fact is that all orders shipped from December 1st will be subject to a 4% adjustment in the FOB price, a measure applied to the entire market,” he said.
“However, in our understanding, we must remain calm at this time in the market and use the lessons learned from the implementation of Law 14.300, that is, we cannot create panic in the end consumer, especially because the payback continues to be very attractive, even after the recent changes,” he added.
Tax Refund Policy in China
China's export tax refund policy aims to encourage exports by reducing costs for exporters and increasing the competitiveness of Chinese products in the international market.
This policy allows companies to recover part or all of the taxes paid during the production of goods destined for export.
The Chinese government regularly adjusts refund rates for different products, increasing or decreasing the percentages according to economic needs and business strategies.
The move comes at a time of growing demand for solar energy around the world, especially in regions that have sought to expand their renewable energy grids as a way to combat climate change.
Today, China is the largest global supplier of photovoltaic modules and plays a crucial role in this market, which makes the change in the export tax discount policy a factor of great relevance.
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