Two quotes for the same shipment: one factory quotes tax-exclusive, the other quotes tax-inclusive. The gap is not a few percentage points — it is the invoice.
Most factories quote tax-exclusive; compliant businesses quote tax-inclusive
- Most factories: quote tax-exclusive prices to everyone, with no invoice.
- Compliant businesses: quote tax-inclusive prices to everyone, with an invoice.
When an invoice is issued, tax-inclusive price = tax-exclusive price × (1 + tax rate). Sales of goods are generally 13%; small-scale taxpayers use a 3% levy rate (reduced to 1% on some transactions in 2026–2027).
So when you see two prices, do not compare the numbers first. Ask first: does this price come with an invoice?
Without an invoice: you save unpaid tax, but you lose the refund
A tax-exclusive price is the price without a VAT invoice. Without the invoice, the exporting entity has no input tax to refund — the refund returns tax already paid at the purchase stage. No invoice, no refund.
What you save is the tax that was not paid. The cost: no refund, no traceable purchase record, and the compliance risk stays on the factory's side.
With an invoice: the higher price is only expensive if the refund does not come back
A tax-inclusive price comes with a special VAT invoice. Only with that invoice can the exporting entity apply for the export tax refund/exemption.
- Refund rate equal to the levy rate: the refund roughly evens it out, and the real cost falls back to near the tax-exclusive price;
- Refund rate below the levy rate: the gap goes into your cost — that part is what you really pay extra.
How the refund is calculated, whether you can get it, and when it is paid — that is professional work: refund rates differ by product category, filing has deadlines, and the documents must be complete. Have a professional accounting firm or an export agent handle it. Do not estimate it yourself.
So just remember two things
- State on the PI whether the price is tax-inclusive or tax-exclusive, and what invoice is issued — that is where the other disputes come from.
- Invoice or no invoice is your own decision: with an invoice, the cost may be a little higher, but the refund and the documents are there; without one, the price is lower, but there is no refund and no invoice.