[SMM Analysis] will aluminum exports surge after full tax rebate?-Shanghai Metals Market

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[SMM Analysis] will aluminum exports surge after full tax rebate?

Translation 06:00:08PM Mar 22, 2019 Source:SMM
The content below was translated by Tencent automatically for reference.

SMM, 22 March: yesterday, the Ministry of Finance issued an announcement on deepening the Reform of value-added tax (VAT). There are three main points related to aluminum in the SMM interpretation announcement:

Second, for export goods and services with a tax rate of 16% and an export tax rebate rate of 16%, the export tax rebate rate will be adjusted to 13%.

Third, the rebate rate of 13% of aluminum products to maintain a 13% tax rebate.

Before adjustment:

After adjustment:

As for the time node, before June 30, 2019, if the VAT is levied at the pre-adjustment rate, the refund rate before the adjustment shall be implemented; if the VAT is levied at the adjusted tax rate, the adjusted refund rate shall be implemented. The implementation time of the refund rate shall be based on the date of issuance of the general invoice for VAT of the tax refund articles. The adjusted tax rebate rate will be implemented after 30 June.

Short-term impact:

For aluminum foil products with an original rebate rate of 16%, aluminum foil with a VAT of 16% purchased in the previous period will be exported as far as possible by June 30 to avoid the loss of tax differentials of three points in order to maintain a full tax rebate. However, the raw material inventory in the aluminum foil production enterprise is basically 3 to 7 days, the buffer period is enough to make the enterprise adjust the production and export rhythm, so there is a high probability that there will be no explosion of aluminum foil export.

For other aluminum materials, the export tax rebate is maintained at 13%, the difference being that the purchase tax rate for raw materials has been adjusted from 16% before April 1 to 13% after April 1. The three-point tax gap will allow manufacturers to hold down stocks of raw materials corresponding to exports by April 1, but not an absolute reduction in stocks of raw materials.

Long-term impact:

In theory, the export cost of aluminum material has dropped, for example: without considering other variables, before adjustment, an exporter buys a ton of aluminum strip price of 16000 yuan / ton export, tax rebate 16000-1.16-13%-1793 yuan; After the adjustment, an exporter also purchased a ton of aluminum strip price of 16000 yuan / ton export, the tax rebate is 16000 to 1.13% to 1840 yuan, the export cost is reduced by 47 yuan / ton. However, in fact, there are many factors that affect export profits and export volume. The price reduction of overseas customers, the fluctuation of processing fees and the change of ratio will affect the export volume, but generally speaking, The full tax rebate is obvious for the improvement of the competitiveness of China's aluminum exports.

Key Words:  Aluminum  import and export 

[SMM Analysis] will aluminum exports surge after full tax rebate?

Translation 06:00:08PM Mar 22, 2019 Source:SMM
The content below was translated by Tencent automatically for reference.

SMM, 22 March: yesterday, the Ministry of Finance issued an announcement on deepening the Reform of value-added tax (VAT). There are three main points related to aluminum in the SMM interpretation announcement:

Second, for export goods and services with a tax rate of 16% and an export tax rebate rate of 16%, the export tax rebate rate will be adjusted to 13%.

Third, the rebate rate of 13% of aluminum products to maintain a 13% tax rebate.

Before adjustment:

After adjustment:

As for the time node, before June 30, 2019, if the VAT is levied at the pre-adjustment rate, the refund rate before the adjustment shall be implemented; if the VAT is levied at the adjusted tax rate, the adjusted refund rate shall be implemented. The implementation time of the refund rate shall be based on the date of issuance of the general invoice for VAT of the tax refund articles. The adjusted tax rebate rate will be implemented after 30 June.

Short-term impact:

For aluminum foil products with an original rebate rate of 16%, aluminum foil with a VAT of 16% purchased in the previous period will be exported as far as possible by June 30 to avoid the loss of tax differentials of three points in order to maintain a full tax rebate. However, the raw material inventory in the aluminum foil production enterprise is basically 3 to 7 days, the buffer period is enough to make the enterprise adjust the production and export rhythm, so there is a high probability that there will be no explosion of aluminum foil export.

For other aluminum materials, the export tax rebate is maintained at 13%, the difference being that the purchase tax rate for raw materials has been adjusted from 16% before April 1 to 13% after April 1. The three-point tax gap will allow manufacturers to hold down stocks of raw materials corresponding to exports by April 1, but not an absolute reduction in stocks of raw materials.

Long-term impact:

In theory, the export cost of aluminum material has dropped, for example: without considering other variables, before adjustment, an exporter buys a ton of aluminum strip price of 16000 yuan / ton export, tax rebate 16000-1.16-13%-1793 yuan; After the adjustment, an exporter also purchased a ton of aluminum strip price of 16000 yuan / ton export, the tax rebate is 16000 to 1.13% to 1840 yuan, the export cost is reduced by 47 yuan / ton. However, in fact, there are many factors that affect export profits and export volume. The price reduction of overseas customers, the fluctuation of processing fees and the change of ratio will affect the export volume, but generally speaking, The full tax rebate is obvious for the improvement of the competitiveness of China's aluminum exports.

Key Words:  Aluminum  import and export