Cancellation of China Export VAT Rebate for Certain Products

(HS Code 39100000 & HS Code 39072990)

Date: 12 January 2026

To Whom It May Concern,

The Ministry of Finance and the State Taxation Administration of China jointly issued an official notice on 8 January 2026, announcing adjustments to export value-added tax (VAT) rebate policies applicable to certain product categories.

Effective from 1 April 2026, China will cancel the export VAT rebate for all products classified under HS code 39100000 (Silicones in primary forms). This HS code generally covers silicone fluids and their derivatives, silicone masterbatches, silicone rubbers, and silicone resins.

In addition, products classified under HS code 39072990, which is generally described as “Other polyethers, in primary forms”, are also subject to the same adjustment. Products affected under this code include SiSiB® STP series silane-terminated polyether polymers, commonly referred to as MS Polymers or STP Polymers.

As a result of these policy changes, the VAT previously refunded upon export will no longer be recoverable. This is expected to lead to an increase in export-level costs of at least 13% for the affected products.

Furthermore, as exporters seek to complete shipments ahead of the policy’s effective date, a concentration of export declarations is anticipated during February and March. This may give rise to tightened logistics capacity, higher freight rates, potential delays in customs clearance, and increased volatility in upstream raw material supply and pricing.

We are closely monitoring developments and working in close coordination with our production, logistics, and finance teams to assess the situation. Within the framework of full regulatory compliance, we are taking proactive measures to mitigate potential impacts and  ensure the orderly  and reliable execution of shipments.

We sincerely appreciate your understanding and support during this period of policy transition. Should you have any questions regarding specific products, orders, or shipment arrangements, please do not hesitate to contact us. We remain committed to maintaining transparent and timely communication and to working closely with you to ensure compliant and efficient business execution under the updated policy environment.

Yours sincerely,

SiSiB SILICONES

Affiliate of SINOPCC GROUP