China Clarifies Import Tax Policies for Pingtan Comprehensive Experimental Zone

September 18, 2013 Posted by China Briefing Reading Time: 3 minutes

Sept. 18 – As the nearest location to Taiwan on Mainland China, Pingtan – Fujian’s largest island – was classified as a Comprehensive Experimental Zone in 2009, highlighting a brand-new model of cross-straits “joint planning, joint development, joint operation, joint management and common benefit.”

In recent years, the country has issued various preferential tax policies to promote the development of the region, and on September 3, 2013, China’s Ministry of Finance, State Administration of Taxation and General Administration of Customs jointly released the “Circular on Import Tax Policies for Pingtan Comprehensive Experimental Zone (caiguanshui [2013] No.62, hereinafter referred to as the ‘Circular’),” which clarifies the tax policies for imported goods within the Pingtan Comprehensive Experimental Zone (hereinafter referred to as the ‘Zone’). Detailed information can be found below.

For the purpose of this article, the customs checkpoints between Pingtan Island and overseas ports are classified as the “first-line” control points and the ones between Pingtan and Mainland China are classified as the “second-line” control points. The “first line” faces more relaxed control oversight than the “second-line.”

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 Zone for production purposes;
Infrastructure materials needed for the construction of factory buildings and storage facilities within the Zone;
Machines, equipment, molds and maintenance components thereof needed for the operations of manufacturing enterprises within the Zone; and
Machines and equipment imported by enterprises engaged in the research and design, maintenance, logistics or service outsourcing industries within the Zone.

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 Zone; and
Goods for transferring purposes needed by logistics enterprises within the Zone.

Moreover, with respect to the selling of tax-exempted or bonded goods (including the goods produced from tax-exempted or bonded materials) by enterprises in Pingtan to individuals, the corresponding import tax shall be paid according to the regulations on imported goods.

In addition, goods produced and processed by the enterprises in Pingtan and sold to the mainland through “second line” control points shall be subject to import value-added tax and consumption tax.

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

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 commercial real estate development projects;
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 points:

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 Zone for personal use;
Goods listed under the Prohibited Catalog of Processing Trade; and
Other non-production related goods.

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