If the suppliers of production enterprises or foreign trade enterprises are identified as "insufficient capacity" by tax authorities, the production enterprises export their own goods, or the foreign trade enterprises purchase goods from upstream suppliers in the name of self-management and export, they will not be able to handle export tax refund, and may even need to be regarded as domestic sales and pay value-added tax.

Production enterprises exporting self-produced goods, or foreign trade enterprises purchasing goods from upstream suppliers and exporting in the name of self-operation, often encounter a letter from the tax authorities. If production enterprises or suppliers of foreign trade enterprises are identified as production equipment or tools that cannot produce the goods they export, that is to say, the production enterprises or suppliers are identified by the tax authorities as "insufficient capacity", then the production enterprises and foreign trade enterprises are likely to face the suspicion of false opening. In this case, the goods exported by enterprises may not be able to handle export tax rebates, or even need to be regarded as domestic sales, pay value-added tax.

In this case, it is particularly critical for export enterprises, especially foreign trade enterprises, to choose suppliers carefully, check their production capacity, and pay attention to the dynamic tracking of the transaction process.

In practice, many export enterprises often do not pay attention to the filing of documents and the archiving management of export documents, and do not have a good understanding of the filing provisions of export tax refund documents, which leads to false or incomplete filing documents, and the tax authorities will recover the tax and late fees.

According to the provisions of the Notice of the Ministry of Finance and the State Administration of Taxation on the Policy of Value-added Tax and Consumption Tax on Export Goods and Services (Finance and Taxation [2012] 39) and the Announcement of the State Administration of Taxation on the Administration Measures of Value-added Tax and Consumption Tax on Export Goods and Services (the State Administration of Taxation Announcement No. 24, 2012) and other normative tax documents, Export enterprises shall, within 15 days after the declaration of export tax refund (exemption), fill out the Catalogue of Documents for the Record of Export Goods in accordance with the order of export goods for tax refund (exemption), indicate the storage place of documents for the record, so as to prepare for the verification by the competent tax authorities.

In practice, many export enterprises often do not pay attention to the filing of documents and the archiving management of export documents, and do not have a good understanding of the regulations on the filing of export tax rebate documents, which leads to false or incomplete filing of documents. Among my clients, many export companies have been charged taxes, late fees or even fines by tax authorities due to incomplete or false documents. Export enterprises should attach great importance to the record document management.