China cancel Tax Rebates from April 1,2026 for glass products under HS Chapter 7

 In a major adjustment to its export policy, China will officially cancel the value-added tax (VAT) export tax rebates for glass and glass products starting April 1, 2026, according to Announcement No. 2 of 2026 jointly issued by the Ministry of Finance and the State Taxation Administration on January 8. This policy change, which covers a wide range of glass products under HS Chapter 70 (Glass and Glassware) – the core scope of the cancellation – includes specific HS codes and corresponding products as follows: HS 7006 (processed glass such as bent, edge-worked or drilled glass), HS 7007 (safety glass including tempered and laminated glass), HS 7008 (multiple-walled insulating glass units), HS 7009 (glass mirrors including rear-view mirrors for vehicles), HS 7010 (glass containers for goods conveyance and packaging), HS 7013 (table, kitchen and decorative glassware), HS 7020 (other glass products for industrial and non-industrial use) and more. Specifically, typical products under these codes include 7006000090 (processed glass from headings 7003-7005), 7013370000 (other glass cups excluding glass-ceramic ones), 7020001100 (conductive glass), 7020001390 (industrial glass products made of fused quartz) and 7020009990 (other non-industrial glass products). This marks the end of the "tax rebate dividend" era for China's glass export industry.

The cancellation of export tax rebates is not an abrupt move but a continuation of China’s efforts to optimize its industrial structure and transform its foreign trade from "scale expansion" to "quality improvement". Prior to this adjustment, the export tax rebate rate for glass products was lowered from 13% to 9% in December 2024, laying the groundwork for the complete cancellation this year. The policy adjustment aims to address three core issues in the industry.

Firstly, it seeks to curb vicious low-price competition. For years, some glass export enterprises have relied on tax rebates to participate in international competition, even selling products at prices lower than their production costs, which has disrupted the global market order and hindered technological upgrading of the industry. By canceling the tax rebates, the profit margin of low-value-added enterprises will be directly compressed, accelerating the exit of backward production capacity and guiding the industry towards high-quality development.

Secondly, the policy is intended to ease international trade frictions. In recent years, European and American countries have frequently initiated anti-dumping and anti-subsidy investigations against Chinese export products on the grounds of "government subsidies". Taking the initiative to cancel export tax rebates is an important measure for China to send a signal of "market-oriented pricing" to the international market, helping to improve the compliance and sustainability of China’s glass product exports.

Thirdly, it aims to optimize resource allocation. Export tax rebates essentially serve as an indirect financial subsidy to overseas consumers; canceling them will redirect relevant financial resources to support domestic core technological research and development, as well as green and low-carbon transformation, aligning with the development pattern of "focusing on the domestic cycle and promoting the dual circulation".

The policy is expected to have a mixed impact on the glass export industry, with short-term pains and long-term opportunities coexisting. In the short term, export costs will rise directly – calculated based on the previous 9% tax rebate rate, enterprises will lose a profit buffer of 9 yuan for every 100 yuan of export products if they cannot pass on the cost to downstream customers, putting significant pressure on small and medium-sized enterprises (SMEs) that rely heavily on tax rebates. Additionally, a surge in shipments is likely before the policy takes effect, which may exacerbate port logistics pressure temporarily.

In the long run, however, the policy will accelerate industry reshuffling, concentrating resources on leading enterprises with technological and brand advantages. Overseas markets have a high dependence on Chinese glass products, so high-quality enterprises can achieve cost transfer through reasonable price increases and product structure optimization. Moreover, the policy will force enterprises to abandon low-price competition and focus on technological innovation, product upgrading, and brand building, bringing greater development space for high-value-added products such as special glass and intelligent glass.

As a key part of China’s foreign trade policy adjustment, the cancellation of export tax rebates for glass products reflects the country’s determination to promote high-quality development of foreign trade and rectify industry drawbacks. For the glass industry, although short-term challenges are inevitable, this policy will serve as an important opportunity to promote industrial transformation and upgrading, helping Chinese glass products shake off the low-price label and enhance their core competitiveness in the global market.