China Releases Customs Supervision Measures for Hengqin New Area

July 12, 2013 Posted by China Briefing Reading Time: 3 minutes

Jul. 12- China’s General Administration of Customs (GAC) released the “Customs Supervision Measures for Hengqin New Area (Order No. 209 of the GAC, hereinafter referred to as ‘Measures’)” on June 27, which have imposed several customs requirements and restrictions on enterprises in the Hengqin New Area (hereinafter referred to as ‘Area’). Detailed information can be found below.

For the purpose of the Measures, 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.”

Requirements Imposed on Enterprises and Customs

Enterprises
According to the Measures, enterprises and entities engaged in the import and export business and enjoy the bonded policies, tax reliefs or the ‘tax refund upon entry’ policy shall go through registration formalities with the customs.

The above-mentioned enterprises and entities shall have relevant accounting books and report forms as required by customs and shall undergo customs inspection. Moreover, such enterprises and entities shall establish computer management systems, thereby to realize networking connection and exchange E-data with customs.

Customs
Customs shall conduct E-account book administration over the following goods:

Bonded goods entering and leaving the Area;
Bonded goods stored in the Area;
Production-related tax-exempted goods; and
Goods from regions outside the Area which enjoy the ‘tax refund upon entry’ policy.

Customs Restrictions

Goods and articles which are prohibited from entry as prescribed by laws, administrative regulations and relevant rules shall not enter the Area from the “first-line” control point, while goods that are prohibited from exit as prescribed by laws, administrative regulations and relevant rules shall not enter the Area from the “second-line” control point through customs declaration.

Enterprises in the Area shall not carry out processing trade business of products listed in the Catalogue of Prohibited Commodities in Processing Trade.

Tax Policies
The following goods are not allowed to be exempted from tax or be treated as bonded goods when entering the Area:

Goods imported for the development projects of commercial real estate;
Goods imported for daily consumption;
Goods that are not allowed to be exempted from tax or be treated as bonded goods according to laws, administrative regulations and relevant rules; and
Goods that are not allowed to be exempted from tax or be treated as bonded goods at the ‘first-line’ control point listed by the Ministry of Finance, state Administration of Taxation and the GAC.

The following production-related goods sold to the Area cannot enjoy a tax refund:

Goods purchased from regions outside the Area for the development projects of commercial real estate;
Goods purchased from regions outside the Area for daily consumption;
Goods that cannot enjoy tax refund according to laws, administrative regulations and relevant rules; and
Goods that are not allowed to enjoy tax refund at the ‘second-line’ control point listed by the Ministry of Finance, State Administration of Taxation and the GAC.

In addition, selling of bonded goods under the following circumstances shall be subject to import duties and import-related value-added tax and consumption tax:

Selling of goods to individuals;
Selling of goods to enterprises in the Area, and such goods won’t be used for production; and
Other circumstances stipulated by laws and regulations.

The Measures are scheduled to take effect on August 1, 2013.

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.

For further details or to contact the firm, please email china@dezshira.com, visit www.dezshira.com, or download the company brochure.

You can stay up to date with the latest business and investment trends across China by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.

Related Reading

Trading With China
This issue of China Briefing Magazine focuses on the minutiae of trading with China – regardless of whether your business has a presence in the country or not. Of special interest to the global small and medium-sized enterprises, this issue explains in detail the myriad regulations concerning trading with the most populous nation on Earth – plus the inevitable tax, customs and administrative matters that go with this.

An Introduction to Development Zones Across Asia
In this issue of Asia Briefing Magazine, we break down the various types of development zones available in China, India and Vietnam specifically, as well as their key characteristics and leading advantages.