Yiwu Business Owners: Export Orders Are Flowing In, but No Purchase Invoices? How to Choose Among Market Procurement 1039 and Tax-Free Cross-Border E-Commerce Exports

Over the past two years, business owners at the International Trade City, Huangyuan Market and Beixiazhu have all run into the same awkward situation: foreign buyers place orders readily, but when you assemble goods from market stalls, small factories and your own warehouse, you settle the payment and ship the goods — yet you simply cannot get a special VAT invoice. Some owners, in a hurry, turn to a freight forwarder for “buying a customs declaration” (买单出口), borrowing someone else's export qualification to declare the goods — convenient as it may be, it becomes a major headache once investigated. In fact, the state long ago left a path open for markets like Yiwu: the market procurement trade method (customs supervision code 1039) and the “tax exemption without invoices” policy for cross-border e-commerce comprehensive pilot zones. The path is there; the key is to choose the right one and use it correctly.

1. First, an explanation: why Yiwu business owners are especially prone to “missing invoices”

Doing business in Yiwu has three characteristics: a wide range of product categories, small individual order values, and scattered sources of supply. One container may hold goods assembled from dozens of stalls, and many of those stalls are small merchants taxed on a fixed quota, who cannot issue special VAT invoices. Add Beixiazhu's livestream e-commerce operations and cross-border small parcels shipped straight from factories or the market, and the input-invoice chain naturally breaks.

At that point, forcing your way into “general trade export tax refunds” gets you nowhere without input invoices; taking the crooked route of “buying a customs declaration” puts you on the red line of fraudulent invoicing and tax fraud. So before you act, ask yourself one question: for the shipment you are exporting, which trade method and which customs supervision code are you declaring under? The answer directly determines whether you can lawfully use the tax-exemption policies.

2. Three compliant routes, explained one by one

1. Market procurement trade exports (customs supervision code 1039) — Yiwu's signature specialty

• Who qualifies: market operators within state-approved specialized market clusters who export on their own account or entrust a market procurement trade operator to export on their behalf, and who are managed under the comprehensive market procurement trade management system that covers all business entities and the entire trade process.
• Core of the policy: Article 3 of the Announcement of the State Taxation Administration on Issuing the Measures for the Administration of Tax Exemption for Goods Exported Under the Market Procurement Trade Method (for Trial Implementation) (国家税务总局公告2015年第89号) states: “Goods exported by market operators on their own account or through a market procurement trade operator entrusted by them under the market procurement trade method shall be exempt from value-added tax.”
• Biggest advantage: VAT is exempted and no input invoices are required; you do not have to gather invoices from every stall one by one. Customs declaration and foreign exchange collection run through the market procurement trade platform, and the documents form a closed loop on their own.
• Constraints you must remember: this is “exemption”, not “refund” — do not expect to receive refunded tax. Under Article 6, the tax-exemption declaration should be filed within the VAT filing period of the month following the month of customs export; where another party is entrusted to export, an Agreement on Entrusted Agency for Export Goods (《委托代理出口货物协议》) must be signed with the market procurement trade operator (Article 4).
• Yiwu origins: Article 12 of the Measures expressly repealed the Official Reply of the State Taxation Administration on the Trial Measures for the Administration of Tax Exemption for Goods Exported Under the Market Procurement Trade Method in Yiwu City, Zhejiang Province (税总函〔2013〕547号). In other words, this nationwide set of market procurement tax-exemption rules was first proven out in Yiwu.

2. “Tax exemption without invoices” for retail exports in cross-border e-commerce comprehensive pilot zones — the route for cross-border small parcels and cross-border stores

Yiwu is the China (Yiwu) Cross-Border E-Commerce Comprehensive Pilot Zone (中国（义乌）跨境电子商务综合试验区), established with the approval of the State Council (国函〔2018〕93号). Under the Notice on Tax Policies for Retail Export Goods in Cross-Border E-Commerce Comprehensive Pilot Zones (《关于跨境电子商务综合试验区零售出口货物税收政策的通知》, 财税〔2018〕103号), e-commerce export enterprises in a pilot zone that export goods for which no valid purchase vouchers have been obtained may, where the following three conditions are met simultaneously, apply the trial policy of VAT and consumption tax exemption:

• Be registered in the pilot zone and have registered the export date, name of goods, unit of measurement, quantity, unit price and amount on the local cross-border e-commerce online comprehensive service platform at the place of registration;
• Declare the exported goods for e-commerce export with the customs authority at the location of the pilot zone;
• The exported goods are not goods for which the Ministry of Finance and the State Taxation Administration have expressly abolished export tax refund (exemption).

In short: even without input invoices, you can lawfully enjoy tax exemption. But neither of the two steps — “platform registration plus local customs declaration” — can be skipped; skip either one and you lose this get-out-of-jail card.

3. Deemed assessment of corporate income tax in comprehensive pilot zones — a uniform deemed taxable profit rate of 4%

The invoice problem solves half the issue; there is still income tax. Under the Announcement on Issues Concerning the Deemed Assessment of Corporate Income Tax for Retail Exports in Cross-Border E-Commerce Comprehensive Pilot Zones (《关于跨境电子商务综合试验区零售出口企业所得税核定征收有关问题的公告》, 国家税务总局公告2019年第36号), cross-border e-commerce enterprises in a pilot zone that meet the above conditions may adopt deemed assessment, with a uniform deemed taxable profit rate of 4%; those that also qualify as small low-profit enterprises may in addition enjoy the corporate income tax preferences for small low-profit enterprises.

Here is the arithmetic: a cross-border e-commerce enterprise in Beixiazhu with annual revenue of CNY 5 million is assessed at a 4% deemed taxable profit rate, giving taxable income of CNY 5,000,000 × 4% = CNY 200,000; if it also meets the small low-profit enterprise conditions, the effective tax burden can fall even further. Compare that with unclear books and a tax audit that requires additional tax based on actual profits (or even a higher deemed amount): this route turns uncertainty into transparent books.

3. How to choose among the three routes? One table makes it clear

4. Policy update: goods that will not sell and are returned — how is the tax handled?

This is a new document issued this year, and cross-border operators should take note. On 6 February 2026, the Ministry of Finance, the General Administration of Customs and the State Taxation Administration issued the Announcement on Preferential Tax Policies for Goods Returned from Cross-Border E-Commerce Exports (《关于跨境电子商务出口退运商品税收优惠政策的公告》, 财政部 海关总署 税务总局公告2026年第16号), which provides: for goods declared for export between 1 January 2026 and 31 December 2027 under cross-border e-commerce customs supervision codes (1210, 9610, 9710, 9810) that are returned to China in their original condition within 6 months from the date of export due to unsold inventory or returns (excluding food), import duties and import-stage value-added tax and consumption tax shall be exempted; export duties already collected at the time of export shall be refunded, and value-added tax and consumption tax already collected shall be handled by reference to the tax rules for domestic-sales returns.

• Documentation requirements: for returns due to unsold inventory, provide a “self-declaration”; for returns due to customer returns, provide return records (including platform return records or rejection-of-delivery records), the goods-return agreement and other documents.
• Repay first, then recover: where an export tax refund has already been obtained, the refunded tax must first be repaid under the current rules, after which the enterprise may apply for exemption and a refund of export duties with the Certificate of Repaid Tax / No Tax Refund for Exported Goods (《出口货物已补税/未退税证明》) issued by the competent tax authority.
• “Original condition” has requirements: the smallest commodity form must be basically the same as at the time of original export; no accessories or parts may be added; the goods may not be processed or modified and must not have been used (except where a defect is discovered only through trial use, or where it can be proven that the customer returned the goods after trial use).
• Remember the timing rule: the goods must be returned to China in their original condition within 6 months; miss that deadline and the benefit is unavailable, so do not delay.

5. Frequently asked questions (Q&A)

Q1: If I export under the market procurement trade method, can I still get an export tax refund?

A: No. Under the 1039 method, VAT is exempted; this is “exemption”, not “refund”, and there is no question of refunding input tax at a refund rate. Its value lies in enabling you to export compliantly without missing invoices.

Q2: I have a stall at the International Trade City and sold a batch of general merchandise to a foreign buyer, but the stall cannot issue invoices. Can I use 1039?

A: This is precisely the typical scenario for 1039. The conditions are that your goods were purchased within an approved specialized market cluster, are cleared under the market procurement trade supervision rules, and are managed under the comprehensive market procurement trade management system. At the same time, do not forget to file the tax-exemption declaration within the prescribed time limit and, where another party is entrusted to export, to sign the Agreement on Entrusted Agency for Export Goods.

Q3: How exactly is the 4% deemed assessment for cross-border e-commerce pilot zones calculated?

A: A 4% deemed taxable profit rate means that your total revenue is multiplied by 4% to arrive at “taxable income”, which is then multiplied by the applicable tax rate. With annual revenue of CNY 5 million, the taxable income is CNY 200,000; if the small low-profit enterprise conditions are also met, further preferences may be added. The premise is platform export registration and a local customs declaration.

Q4: If goods are returned, must tax still be paid at the import stage?

A: Where the conditions of Announcement No. 16 of 2026 are met, import duties and import-stage value-added tax and consumption tax are exempted; export duties already collected at the time of export may be refunded. However, where an export tax refund has already been obtained for the goods, the refunded tax must first be repaid before the matter can be handled with the Certificate of Repaid Tax / No Tax Refund for Exported Goods.

Q5: To save trouble, can I ask a freight forwarder to “buy a customs declaration” and declare under another company's qualification?

A: Not advisable; the risks are substantial. The export entity, the customs declaration form, foreign exchange collection and invoices must be mutually verifiable; using another party's export qualification may at best void your exemption or refund entitlement and at worst expose fraudulent invoicing and tax fraud. The small agency fee you save is nowhere near the additional tax, late-payment charges and fines that may follow.

6. Sources

• Announcement of the State Taxation Administration on Issuing the Measures for the Administration of Tax Exemption for Goods Exported Under the Market Procurement Trade Method (for Trial Implementation) (国家税务总局公告2015年第89号) gov.cn · State Council Gazette
• Notice of the Ministry of Finance, the State Taxation Administration, the Ministry of Commerce and the General Administration of Customs on Tax Policies for Retail Export Goods in Cross-Border E-Commerce Comprehensive Pilot Zones (财税〔2018〕103号) gov.cn · Policy Documents Library
• Announcement of the State Taxation Administration on Issues Concerning the Deemed Assessment of Corporate Income Tax for Retail Exports in Cross-Border E-Commerce Comprehensive Pilot Zones (国家税务总局公告2019年第36号) gov.cn · Policy Documents Library
• Announcement of the Ministry of Finance, the General Administration of Customs and the State Taxation Administration on Preferential Tax Policies for Goods Returned from Cross-Border E-Commerce Exports (财政部 海关总署 税务总局公告2026年第16号) gov.cn · Policy Documents Library
• Official Reply of the State Council on Approving the Establishment of Cross-Border E-Commerce Comprehensive Pilot Zones in Beijing and 21 Other Cities (国函〔2018〕93号, including Yiwu City) gov.cn · Policy Documents Library

Conclusion

Missing invoices does not mean there is no way forward; what is dangerous is taking the wrong way. Whether your business fits 1039, the pilot-zone exemption without invoices, or straightforward general trade tax refunds depends on where the goods come from, which code you declare under, and how many invoices you can obtain. If you are not sure, send us your recent customs declarations and purchasing details and Jinfan Tax & Finance will work through the numbers with you before you act — every cent saved through compliance is money genuinely saved. Jinfan (Yiwu) Finance & Tax Management Co., Ltd. serves Yiwu small and medium-sized enterprises on tax and finance compliance.