A "duty-free" scheme has been launched in Qingdao allowing overseas visitors to receive a tax rebate on purchases from the 33 participating stores in the port city, according to Qingdao Daily on April 1.

A tax staff official explains the new VAT refund policy at a participating store in Qingdao. [Photo/Qingdao Daily]

The new policy, issued by the Ministry of Finance and General Administration of Customs and State Administration of Taxation, specifies that tourists, when leaving the city, can apply for RMB tax rebates equal to 11 percent of the Value-Added Tax (VAT) incurred from their purchases.

Tourists need to fill in application forms and provide receipts from participating stores, and visit customs authorities before processing at a designated office at the Liuting International Airport.

It is notable that 2 percent of VAT will be deducted as a handling charge, meaning that applicants will eventually get a 9 percent tax rebate.

The 33 stores taking part in the "duty-free" scheme mainly sell merchandise, local specialties and souvenirs.

The municipal financing authorities said that the policy would bring benefits to more than 1.2 million foreign visitors every year and help to promote tourism in the city.