The study takes the implementation of "Notice on Tax Policies Concerning the Refund of Value-Added Tax Credits for Certain Industries in 2018" as a quasi-natural experiment, selects Shanghai and Shenzhen A-share listed companies in 2015—2020 as the research samples, and uses the DID model to study the effect of the implementation of this policy on enterprise innovation. It is found that compared with the enterprises in the control group, the implementation of the "VAT rebate" policy significantly increased the innovation level of the enterprises in the experimental group. The policy has a significant promoting effect on the innovation level of enterprises in the growth or maturity period, but has no significant impact on enterprises in the recession period. Compared with enterprises in the growth period, this policy can better improve the innovation level of enterprises in the maturity period. In the case of market competition, it is found that the "VAT rebate" policy has a significant effect on promoting the innovation level of enterprises with low product market competition. The research confirms the promotion effect of the "VAT rebate" policy on enterprise innovation, and provides insights for the new round of value-added tax reform.