China revises export VAT rebates for solar and battery products

The Ministry of Finance and the General Administration of Taxation of China have announced changes to the export value added tax (VAT) rebate policy for photovoltaic (PV) and battery products.  

Under the revised framework, export VAT rebates will be withdrawn for a range of PV products from 01 April 2026. For battery products, the export VAT rebate rate will be reduced from 9% to 6% from the same date and will be fully eliminated from 01 January 2027.

In the solar segment, the covered products include monocrystalline silicon wafers with diameters above 15.24 cm, both above and below 220 micrometres in thickness, doped for use in the electronic industry. Most mainstream PV wafers currently manufactured fall within this definition. Unassembled solar cells and finished photovoltaic modules are also included.

For batteries, the policy extends beyond lithium-ion batteries and battery packs. It covers other energy storage technologies, such as all vanadium redox flow batteries, as well as key upstream materials used in lithium-based batteries. These include lithium hexafluorophosphate, lithium manganate, lithium cobalt oxide, and lithium nickel cobalt manganese oxides.

The authorities have clarified that excise tax treatment remains unchanged, and export rebates or exemptions linked to excise duties will continue to apply. The applicable VAT rebate rate will be determined based on the export date recorded in the customs declaration.

This represents the second major adjustment to China’s export rebate regime for solar and battery products in a little over a year. In the earlier revision, announced on 15 November 2024 and implemented from 01 December 2024, export VAT rebate rates for selected refined oil products, solar equipment, batteries, and certain non-metallic mineral products were reduced from 13% to 9%.

The policy shift comes against the backdrop of increasing pressure on China’s clean energy supply chain, marked by weak margins, persistent capacity additions, and heightened trade scrutiny in overseas markets. China’s VAT export rebate system has long been a central industrial support mechanism for its solar and battery manufacturing ecosystem.

In contrast, export VAT rebates for rare earth permanent magnets remain unchanged. Exporters of these products continue to receive a full 13% rebate. China accounts for around 90% of global rare earth magnet production, which is critical for electric vehicles, wind turbines, robotics, and other advanced technologies.

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