China Clarifies Import Tax Policies for Hengqin New Area

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May 30 – China’s Ministry of Finance, State Administration of Taxation and General Administration of Customs jointly released the “Circular on Import Tax Policies for Hengqin New Area (caiguanshui [2013] No.17, hereinafter referred to as the ‘Circular’)” on May 29, which clarifies tax policies for imported goods in Hengqin New Area (hereinafter referred to as the ‘Area’). Detailed information can be found below.

For the purpose of the article, the customs checkpoint between Hengqin Island and Macau is classified as the “first-line” control point and the one between Hengqin and the mainland is classified as the “second-line” control point. The “first line” faces more relaxed control oversight than the “second-line.”

Preferential tax polices

According to the Circular, the importation of the following goods shall be recorded and exempted from import taxes:

  • Machines and equipment needed for infrastructure construction projects within the Area for production purpose;
  • Infrastructure materials needed for the construction of factory buildings and storage facilities in the Area;
  • Machines, equipment, molds and maintenance components thereof needed for the operations of manufacturing enterprises within the Area; and
  • Machines and equipment imported by enterprises engaged in the reach and design, maintenance, logistics or service outsourcing industry within the Area.

The import of the following goods shall be recorded and subject to bonded policies:

  • Raw materials, spare parts, components, packing materials and consumable materials needed for the processing of export-oriented products by enterprises within the Area; and
  • Goods for transferring purposes needed by logistics enterprises within the Area.

Exceptions

The following goods are not allowed to be exempted from tax at the “first line” control point:

  • Goods that are not allowed to be exempted from tax according to laws, administrative regulations and relevant rules;
  • Goods that are not allowed to be imported by the State;
  • Goods imported for the development projects of commercial real estate;
  • Goods for daily consumption; and
  • Other non production-related goods.

The following goods shall not be treated as bonded goods at the “first line” control point:

  • Goods that are not allowed to be treated as bonded goods according to laws, administrative regulations and relevant rules;
  • Goods that are not allowed to be imported by the State;
  • Goods imported for the development projects of commercial real estate;
  • Goods for daily consumption purchased by individuals, enterprises and administrative institutions in the Area for personal use;
  • Goods listed under the Prohibited Catalog of Processing Trade; and
  • Other non-production related goods.

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