China Strengthens Steel Export Tax Management
Focusing on the impact of the new policy on business.
In March 2025, five key Chinese government departments jointly issued new regulations.
The State Administration of Taxation (SAT), the Ministry of Finance (MOF), the Ministry of Commerce (MOFCOM), the General Administration of Customs (GAC) and the General Administration of Market Supervision and Administration (GAMSA) jointly announced that from April 2025, all exported iron and steel products will have to be subject to value-added tax (VAT) and consumption tax (CGT) based on the standard domestic sales. The policy focuses on tax loopholes that existed in the past, particularly irregularities through third-party agents.
The Core Elements Of The New Policy
1. Harmonization of tax standards.
Whether exported directly by steel mills or through agents, all steel products must pay the same taxes as domestic sales. In the past, some enterprises declared customs at low prices through agents, but this approach is no longer feasible.
2. Strict registration review.
Enterprises must complete tax registration before exporting. If you entrust an agent to export, you must get the “entrusted export certificate” to the agent within 30 days after the goods are declared. Customs will refuse to release the goods if the tax registration is not completed or if there is a problem of tax arrears.
3. Combating irregularities
The new regulations specifically name the “buy single export” behavior. This behavior refers to borrowing another company’s export qualification and evading taxes through fake contracts and invoices. Since the abolition of the steel export tax rebate in 2021, this kind of irregular operation has become more and more common. When this is detected now, not only will the goods be detained, but the company may also be fined or even have its business license revoked.
Reasons Behind The Policy
China’s steel exports exceeded 100 million tons for the first time in 2024, but low-priced exports triggered anti-dumping investigations in several countries. Some companies have exported steel at below-cost prices through irregularities, harming national tax revenues and disrupting market order. The new policy is to plug these loopholes and return export prices to normal levels.
Analysis Of The Impact On Enterprises
Rising export costs
Take ordinary carbon steel as an example, according to the new regulations per ton needs to pay about 300 yuan more taxes. This has the greatest impact on small and medium-sized steel mills whose profits are already slim.
Complicated operation process
Enterprises need to prepare complete tax documents in advance, and customs clearance time may be extended by 3-5 working days. Enterprises entrusting agents to export should pay special attention to the validity period of supporting documents.
Elimination of non-compliant enterprises
Companies relying on “buy orders to export” will not be able to continue to operate. A Zhejiang trading company investigated last year was fined 38 million yuan for false customs declaration, and the person in charge was held criminally liable.
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