Payment platforms provide digital tax returns to Chinese tourists
October 8, 2019 Category China News Round-up, Weekly
Every year, hundreds of millions of dollars are being left behind as cross-border travelers don’t reclaim the value-added tax that is available to them. According to data from SAP Concur, reclaimable VAT is available on about 4% of global travel spending. Moreover, a recent study by Taxback International, a specialist in global VAT recovery and compliance, noted that up to USD30 billion is going unclaimed annually in VAT recovery on travel expenses. The primary cause is that overseas travelers don’t want to go through the hassle of doing the paperwork required to get back the VAT on their purchases, or they feel intimidated by the long lines at tax refund centers.
The country’s two largest mobile payment platforms are competing to offer streamlined refund services to tourists. Tax refunds now only take seconds, circumventing the need to fill in lengthy forms containing billing details, and the subsequent months of waiting. Formed in partnership with Global Tax Free, Alipay, Ant Financial’s payment tool and a subsidiary of Alibaba Group, claimed that its new paperless mobile tax refund app launched last year was the first of its kind worldwide. Users must remember to scan their tax refund receipts within 90 days of product purchase via the app to receive an instant refund in yuan. Visits to an airport tax refund counter are no longer required.
Alipay first ventured into the tax refund business in 2013. Today up to 85 international airports support real-time tax refunds to Alipay accounts. WeChat Pay, the mobile wallet of WeChat, has partnered with Swiss company Global Blue to offer an instant tax refund mini program for Chinese tourists. Both partners have also joined forces to offer in-store refunds. Alipay offers in-store refunds in 85 luxury stores in Europe, covering 15 iconic brands in cities such as Paris, Milan, Rome, Barcelona and London. Alipay and WeChat Pay are jostling for a larger share of the international mobile payment segment as the domestic market nears saturation. The two companies accounted for around 94% of China’s CNY47.7 trillion third-party mobile payment market in the first quarter of this year, the China Daily reports.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world