Dacheng Lawyers Team Assists Enterprise in Resolving Tax Refund Deadlock and Successfully Obtains Over RMB 140 Million in Tax Refunds

Recently, the team led by Wang Xu of Dacheng Law Offices drew on profound expertise in cross-border taxation and dispute resolution to help a wholly foreign-owned enterprise (WFOE) break a one-and-a-half-year VAT export tax refund deadlock. The enterprise finally received more than RMB 140 million in tax refunds. With a large amount involved and complicated legal relations, this case stands as another landmark achievement in cross-border tax compliance and dispute resolution.

 

The enterprise is a WFOE established in China, controlled by an American entrepreneur. Due to insufficient understanding of China’s taxation and legal policies, the company made major mistakes in VAT export tax refund declarations by mixing self-produced products with deemed self-produced products, and had obvious loopholes in document management and legal compliance.

 

After identifying the issues, the tax authority suspended the tax refund and held multiple rounds of communication with the enterprise. However, the enterprise’s misunderstanding of tax rules and special circumstances of the case led to a complete standstill of the refund process, and the tax authority also launched a formal investigation.

 

Having failed to find effective solutions through various channels, the enterprise retained Wang Xu’s team to take charge of the matter. The team provided comprehensive tax governance and refund declaration services via administrative information disclosure applications, civil litigation, negotiations and legal opinion issuance.

 

1. Application for Administrative Information Disclosure

 

The team successfully obtained the disclosure of three key regulatory documents including the Work Specifications for the Administration of Export Tax Refunds (Exemptions) by National Tax Authorities, laying an important policy foundation for subsequent dispute resolution.

 

2. Legal Negotiations and Supplier Coordination

 

The team conducted one-on-one communication and negotiations with more than ten suppliers and their competent tax authorities, resolved problems regarding invoicing and payment, and reached consensus among all parties to pave the way for tax refund applications.

 

3. Preparation of Correspondence Investigation Materials and Declaration Support

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Given the huge amount of funds involved, the tax authority conducted multiple rounds of correspondence investigations. The Dacheng team participated in the whole process, assisted the enterprise in preparing legal documents and evidence materials. After multiple rounds of communication and coordination, the enterprise completed 11 successful VAT export tax refund declarations and obtained over RMB 140 million in total refunds, thoroughly resolving the tax refund issue.

 

4. Civil Litigation to Promote Re-issuance of Invoices

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A large number of defective invoices needed to be re-issued for the refund application, while many suppliers refused to do so due to complicated procedures. The team urged suppliers to re-issue invoices through administrative complaints, negotiations and civil litigation, providing solid support for the successful tax refund.

 

This cross-border case involves tax compliance requirements across mainland China, Hong Kong (where the intermediate company is registered) and the United States. Beyond assisting with on-site investigations and correspondence from domestic tax authorities, the team delivered systematic cross-border tax governance services and put forward practical suggestions to improve work efficiency for tax authorities, demonstrating outstanding professional competence and innovative problem-solving capabilities.

 

The total amount related to this case exceeds RMB 3 billion, making it a key tax dispute case in a southern province. It covers multiple legal issues including VAT export tax refund for WFOEs and foreign exchange compliance, and has extensive reference value for the industry.

 

After resolving the refund issue, the enterprise gained a clear understanding of China’s tax rules, continued to generate operating profits and paid hundreds of millions of yuan in corporate income tax. It has become a key local taxpayer and received official recognition, building a sound interactive relationship between the enterprise and tax authorities.

 

The successful handling of this case once again proves the team’s strengths in dealing with large-value, complex tax disputes and cross-border legal affairs.

 

Going forward, the team will continue to provide professional, efficient and integrated one-stop cross-border legal and tax solutions for enterprises and high-net-worth individuals.