The Zhejiang Regulatory Bureau of the Ministry of Finance has recently implemented a three-dimensional internal control system for the business of VAT collections followed by refunds. The system is built on tiered classification management, capacity building through training, and on-site supervision.
Under this mechanism, applicant companies are divided into three types for differentiated oversight. First-time refund applicants must undergo on-site supervision with dual-person verification and full documentation. Companies with large refund amounts or complex operations are designated as key monitoring targets, with on-site supervision triggered as needed to prevent policy arbitrage. For enterprises with a long history of compliance and no irregularities, off-site supervision is the primary method, supplemented by audit ledgers to ensure no gaps in internal control.
Refund application materials are simultaneously color-coded as red, yellow, or green. Complete and accurate materials receive a green label and proceed to formal review; those missing a few non-critical documents get a yellow label, with local finance departments urged to ensure timely supplementation; incomplete, inconsistent, or suspect materials are marked red and returned to local finance departments for mandatory re-review.
The bureau also organized special training sessions for city- and district-level finance departments, covering policy interpretation, process walkthroughs, and typical case analysis to clarify compliance and accuracy review points, and established an interactive feedback mechanism for common issues. Additionally, the bureau conducted on-site supervision visits to applicant companies, focusing on core aspects such as material review, entity qualification verification, and data checking, engaging in in-depth discussions with local finance staff and company personnel to verify any red flags identified through off-site monitoring.