2026 Eligibility of Export Goods Converted for Domestic Sales for Export Tax Refund Policy
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I am engaged in cross-border home goods export. Last year I expanded my business to the domestic live streaming e-commerce track. Last month, a batch of 1200 sets of outdoor folding chairs bound for the EU was directly rejected by the overseas customer who suddenly went bankrupt.
At present, this batch of goods has completed export customs declaration and is stored in the Yangshan Port Bonded Warehouse. I plan to convert it for domestic sales and sell it in domestic live streaming rooms. I have not made deduction for the input VAT of this batch of goods before, and I have submitted the pre-declaration for export tax refund on the tax system.
Now I have no clear idea about the policy requirements, and I would like to ask whether this export-to-domestic sales arrangement is eligible for tax refund. If it meets the conditions, what application processes should I follow, and what compliance risks need special attention?
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
First，a clear conclusion: your current situation meets the access conditions for 2026 export-to-domestic sales tax refund，and you are eligible to apply for the tax refund. A common misconception in the industry is that export goods converted for domestic sales can only apply for input tax deduction rather than tax refund. Many enterprises even directly pay supplementary taxes for export links，suffering unnecessary loss of 8%-13% tax refund benefits. Some enterprises with non-standard operations will face tax-related early warnings due to conflicts between input tax deduction and tax refund declaration.
You need to complete three core operations first: First，withdraw the submitted pre-declaration for export tax refund，apply to customs for the，no supplementary tax for export links is required，Second，complete the domestic sales declaration for goods leaving the bonded warehouse，keep the input VAT separately without making deduction against domestic output VAT，Third，submit the tax refund application within 30 days after the goods are warehoused，and the tax refund will be credited to your account within 15 working days after verification and approval.
According to calculation，the tax refund rate of this batch of goods is 13%，and the refundable input VAT is about RMB 273,000. You only need to pay around RMB 8,000 for customs declaration amendment and bonded warehouse transshipment，with a comprehensive return rate of over 97%. Please note that input tax deduction and export tax refund cannot be applied for at the same time，otherwise it will trigger an early warning of the tax system，leading to 3-6 months of letter investigation and verification.
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
Two core prerequisites shall be met for 2026 customs export-to-domestic sales declaration amendment operations: first, the goods have not completed the outbound customs declaration, and second, no overseas ownership transfer of the goods has occurred. Your current goods stored in Yangshan Port Bonded Warehouse have not completed the final outbound declaration, so you can directly submit the export-to-domestic sales application through China International Trade Single Window, upload three core documents including the original export customs declaration, overseas customer rejection certificate and domestic sales trade contract.
The declaration amendment can be completed within 3 working days under normal circumstances, and there is no need to go through the process of deleting and re-submitting the customs declaration. If the goods have already left the border, you need to go through return customs declaration first, then apply for domestic sales. The declaration amendment cycle will be extended to 15 working days, and supervision service fees for the return link shall be paid.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
For goods currently stored in Yangshan Port Bonded Warehouse converted for domestic sales, you can directly choose the path of goods leaving the bonded warehouse for domestic delivery, no need to arrange barges to transport the goods to the port before inland transportation. The overall logistics cost can be reduced by around 40%. You need to submit the domestic sales outbound application to the bonded warehouse operator in advance, and book customs supervised vehicles for transshipment at the same time. The goods can complete the outbound process within 24 hours under normal circumstances.
If ordinary vehicles are selected for transportation, it will be judged as breaking away from customs supervision, and the goods will face the risk of seizure. Currently, Yangshan Port Bonded Warehouse provides 3 days of free storage period for export-to-domestic goods. After exceeding the free storage period, the storage fee is RMB 1.2 per cubic meter per day. It is recommended that you arrange the goods outbound immediately after the declaration amendment is approved.
SophiaYears of service：7Customer Rating：5.0
Senior Customs AdvisorStart a Chat
Two paths are available for VAT treatment of export goods converted for domestic sales: one is to apply for export tax refund, the other is to make input tax deduction to offset domestic output VAT. Only one of the two paths can be selected.
You have developed the domestic live streaming e-commerce business, if the scale of domestic output VAT is relatively large, you can calculate the actual benefits of the two methods: if you choose input tax deduction, you can directly offset the current output VAT without going through the tax refund application process, and the fund arrival cycle is faster; if you choose export tax refund, you can get direct cash return without waiting for the generation of output VAT. Please note that no matter which method you choose, you need to keep the full set of documents for goods flow and document flow, and no repeated input tax deduction is allowed.
WilliamYears of service：10Customer Rating：5.0
International Logistics AdvisorStart a Chat
The collection and settlement of payments for export-to-domestic sales goods shall comply with the relevant 2026 requirements of the State Administration of Foreign Exchange. If you do not need to return the deposit paid by the overseas customer before, you can directly declare it as "other income under current account", no export foreign exchange verification is required. The income generated from domestic sales shall be directly declared as domestic trade income, no cross-border settlement channel is required.
Please note that you cannot declare domestic sales income as export foreign exchange receipt, otherwise it will trigger foreign exchange supervision early warning, and your account will face the risk of being frozen. If part of the payment has been collected through cross-border channels, you can directly submit the export-to-domestic sales supporting documents to the bank to complete the foreign exchange receipt reconciliation, which will not cause exchange loss.
CharlotteYears of service：4Customer Rating：5.0
Currency Exchange AdvisorStart a Chat
You need to sort out three core legal documents in advance to avoid subsequent compliance risks: first, the bankruptcy certificate of the overseas customer, which shall be issued by the local court or commercial registration authority, as the core basis for your export-to-domestic sales application; second, relevant contracts for domestic sales, which clarify product quality standards and after-sales responsibilities, to avoid intellectual property disputes; third, service agreements signed with logistics and customs declaration service providers, which clarify the division of responsibilities in declaration amendment and transportation links.
If you suffer losses caused by service providers' operational errors, you can directly claim compensation according to the agreements. Please note that if this batch of goods is printed with the exclusive logo of the overseas customer, you shall confirm whether you have obtained the intellectual property authorization from the customer before converting the goods for domestic sales, otherwise you will face the risk of infringement complaints.
EmilyYears of service：3Customer Rating：5.0
Client Success AdvisorStart a Chat
The customs inspection rate for export-to-domestic sales goods leaving the warehouse is about 12%, which is much higher than the inspection rate of ordinary domestic sales goods. You need to sort out documents including packing list and product test report in advance, and cooperate with customs for unpacking inspection.
For outdoor folding chairs, which belong to ordinary consumer goods, the inspection focuses on whether the goods are consistent with the declared product name, quantity and specification, and whether any undeclared other goods are mixed. If inconsistent declaration is found during the inspection, you will face penalties of declaration amendment or fine, and enterprises with serious circumstances will be included in the customs dishonest enterprise list. Under normal inspection conditions, the release will be completed within 2 hours without extra costs.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
Four core documents are required to submit the export-to-domestic sales tax refund application: first, the issued by customs, second, the customs declaration of the original exported goods, third, the special VAT invoice for input tax, fourth, relevant supporting documents for domestic sales conversion. You need to ensure the consistency of four flows, namely the full match of goods flow, capital flow, document flow and invoice flow, otherwise it will trigger tax letter investigation. After the application is submitted, the tax authority will complete verification within 7 working days, and the tax refund will be credited to your account within 15 working days after the verification is approved. Please note that you need to submit the tax refund application within 90 days after the goods complete the domestic sales declaration, otherwise you will not be eligible for the tax refund policy.
OliviaYears of service：5Customer Rating：5.0
Senior Customs AdvisorStart a Chat
You can establish a regular export-to-domestic sales handling mechanism for such goods rejected by overseas customers, reserve certain inventory positions in domestic bonded warehouses in advance. Once overseas order cancellation occurs, you can directly convert the goods for domestic sales, the overall handling cycle can be shortened from the original 30 days to 7 days, and the logistics cost can be reduced by around 60%.
Meanwhile, you can adjust your stocking strategy combining the demands of overseas markets and the sales performance of domestic markets. For products with high universality, reserve around 30% of the inventory to adapt to the domestic market, to avoid overstocking. According to calculation, after establishing this mechanism, your enterprise's inventory turnover rate can be increased by 28%, and the overall supply chain cost can be reduced by around 12%.