China Adjusts Tax-Free Shopping Policies for Hainan Island

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Oct. 25 – In a move to boost tourism in the island province of Hainan, China’s Ministry of Finance (MOF) released the “Announcement on Adjusting the Tax-free Shopping Policies for Visitors Departing from Hainan Island (Announcement [2012] No.73, hereinafter referred to as ‘Announcement’) on October 22, which is scheduled to take effect from November 1, 2012.

The Announcement makes the following adjustments to the tax-free policies for visitors departing from Hainan Island:

  • Adjusting the minimum age threshold of applicable visitors to age 16.
  • Adding three categories of tax-free commodities, including beauty and health care equipment, tableware and kitchen appliances, and toys; with the scope of tax-free commodities expanding to 21 categories.
  • Adjusting the upper value limit of tax-free commodities purchased each time by every visitor departing from Hainan Island to RMB8,000, with the number of tax-free commodities purchased expanding to an appropriate extent.

Apart from the above-mentioned adjustments, other contents of the tax-free shopping policies for visitors departing from Hainan Island shall be carried out according to the “Announcement of the Ministry of Finance Concerning the Pilot Implementation of Tax-free Shopping Polices for Visitors Departing from Hainan Island (Announcement [2012] No.14),” and the tax-free commodities must comply with relevant regulations regarding inspection and quarantine, Chinese tags, product certification, hygiene licenses, and quality safety.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.

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