Starting April 1st This Year, Export Tax Rebates For Diamond Grinding Wheels Will Be Cancelled

On the evening of January 8 this year, the Ministry of Finance and the State Taxation Administration announced that, starting from April 1, 2026, the export tax rebate for photovoltaic and other products will be cancelled, including abrasive products such as grinding wheels, sandpaper, and abrasive cloth.

 

Export tax rebates refer to the refund of value-added tax (VAT) paid domestically by exporting companies. Since these companies also pay taxes in overseas countries, China implemented an export tax rebate policy in 1985 to avoid double taxation and boost the international competitiveness of its products. Currently, China has four export tax rebate rates: 13%, 9%, 6%, and 0%.

More than a year ago, the export tax rebate rate for abrasive products was lowered. In November 2024, the Ministry of Finance and the State Taxation Administration reduced the export tax rebate rate for abrasive products such as grinding wheels made of bonded synthetic or natural diamond, other stone mills, stone rollers and similar products made of bonded synthetic or natural diamond, hand-held polishing oilstones, abrasive cloth, and sandpaper from 13% to 9%, a reduction of over 30%, effective December 1, 2024.

 

This policy adjustment signifies the end of the "tax rebate subsidy era" for products such as grinding wheels, abrasive paper, and sandpaper. The price advantage brought by tax rebates helped domestic abrasive manufacturers secure international orders for a period of time, but it also intensified price competition within the industry, leading to fierce price wars and continuously shrinking profit margins. Eliminating export tax rebates will increase export costs for companies, potentially impacting profits and market competitiveness in the short term. However, in the long run, it will also help companies return to rational pricing, accelerate the elimination of outdated production capacity, and reduce the risks of international trade frictions.

 

As customers who import diamond grinding wheels from China, they may be concerned whether the cost of importing diamond grinding wheels from China will increase?

 

Of course, with the cancellation of the export tax rebate policy. The cost for Chinese exporters is bound to increase.

• In the short term, completing import operations before April 1st can reduce costs.
• In the long run, the quality of diamond grinding wheels produced in China is getting better and better. In terms of price, it is actually lower than many European and Japanese products. Importing diamond grinding wheels from China is still the optimal choice.

As a Chinese diamond tool manufacturer, we face greater pressure, but with the popularization of AI and intelligent machinery, our productivity is constantly improving. Therefore, in the future, Chinese made diamond grinding wheels will still be very competitive.