China's Notice on Adjusting Catalogs Related to the Import Taxation Policies for Major Technical Equipment

To provincial administrations of finance, provincial industry & information technology administrations, state administrations of taxation, the Bureau of Finance of Xinjiang Production & Construction Corps, Guangdong Sub-Administration of Customs, customs directly subordinated to the GAC, and provincial branch offices of the Ministry of Finance:

In accordance with the CaiGuanShui [2009] No. 55 document - China's official notice on adjusting the import taxation for major technical equipment, relevant adjustments are hereby made to the associated catalogs of equipment and products, key parts and raw materials, and equipment and products not exempt from import taxes:

1. The Catalog of Major Technical Equipment & Products Supported by the State (2012 revision) (see Annex 1) and the List of Key Parts & Raw Materials Imported for Major Technical Equipment & Products (2012 revision) (see Annex 2) shall take effect from April 1, 2012, and eligible Chinese enterprises, which need to import as listed in the Annex 2 for making the equipment and products listed in the Annex 1, may be exempt from import duties and import value-added tax (VAT).

2. The Catalog of Major Technical Equipment & Products Not Exempt from Import Taxation (2012 revision) (see Annex 3) shall take effect from April 1, 2012. The following projects and enterprises, which are approved after April 1, 2012 to enjoy import taxation preferences according to the Notice of the State Council of China on Adjusting Taxation for Import Equipment (GuoFa [1997] No. 37), shall pay import duties for their imports of self-use equipment listed in Annex 3 herein and accompanying technologies, parts and accessories.

1) Chinese-invested and foreign-invested projects enjoying the state encouragement.

2) Loan projects provided by foreign governments and international financial organizations.

3) Processing-trade enterprises with non-priced equipment supplied by foreign clients.

4) Foreign-invested competitive industrial projects in mid/west China regions.

5) Technological transformation projects launched by foreign-invested enterprises and foreign-invested research centers by using their own capitals, which are regulated in GACC Notice On Import Taxation Policy For Encouraging Foreign Investment (ShuShui [1999] No. 791).

The above projects and enterprises approved before April 1, 2012, if importing equipment listed in the Annex 3 herein before September 31, 2012, shall still comply with the Annex 3 of CaiGuanShui [2010] No. 17, the Annex 3 of CaiGuanShui [2010] No.50, and the Annex 3 of CaiGuanShui [2011] No. 45; from October 1, 2012, such projects and enterprises shall pay import duties for their imports of the equipment listed in the Annex 3 herein.

3. Where obtaining tax-free eligibility in 2011, the manufacturers and the owners undertaking the self-reliant projects of urban railway system or nuclear power equipment, if declaring for imports of key parts and raw materials before April 1 of 2012, shall still comply with the CaiGuanShui [2010] No. 17, [2010] No. 50, [2011] No. 45 and their annexes; from April 1, 2012, such manufacturers and owners shall comply with relevant regulations of this Notice.

4. Any new applicants for import taxation preferences for the Annex 1-listed goods shall submit application documents between March 1 and March 31 of 2012, including the value of parts and raw materials imported during April 1-December 31 of 2012; and specific procedures and requirements shall still be in compliance with the annexed Provisional Regulations for Import Taxation on Major Technical Equipment under the CaiGuanShui [2009] No. 55 document.

Provincial industry and information technology administrations shall conduct preliminary examination of local applications and submit the application documents with their preliminary comments to the Ministry of Industry and Information Technology before April 15, 2012.

From April 1, 2012, where being qualified through the preliminary examination, the new applicants may apply to the customs for release of parts and raw materials in advance based on the guarantee of tax payment and on certificates issued by governing administrations.

5. The Annex 1 herein, the Catalog of Major Technical Equipment & Products Supported by the State (2012 revision), has provided adjusted technical specifications for three kinds of equipment including wind-driven generators (units) and their parts (blades, gear cases and electric generators), direct-current power transmission and transformation equipment, and alternating-current power transmission and transformation equipment (see details in Annex 1).

Manufacturers of the three kinds of equipment, which have obtained duty-exemption eligibility in 2011, may continue enjoying the duty exemption until March 31, 2012; where applying for import taxation preferences for April 1-December 31 of 2012, such manufacturers shall submit application documents according to the procedures and requirements in the Article 4 herein during March 1-31 of 2012.

Provincial industry and information technology administrations shall finish the preliminary examination with related administrations in accordance with the Article 4 herein before April 15, 2012.

6. All enterprises having enjoyed those taxation preferences in 2011 shall submit their reports on implementation of tax preferences as per the annexed Provisional Regulations of the CaiGuanShui [2009] No. 55 during March 1-31 of 2012. The format and requirements of such reports are provided in the Annex 4 herein, the Report on Implementation of Import Taxation Policies for Major Technical Equipment Enterprises; the applicants shall fill in the reports and related forms as required therein.

7. From April 1, 2012, the following documents shall be repealed:

1) China's Notice on Adjusting Lists Related to the Provisional Regulations for Import Taxation on Major Technical Equipment (CaiGuanShui [2010] No. 17);

2) China's Notice on Adjusting Import Taxation Policies for Major Technical Equipment as for Environmental Protection & Comprehensive Resource Utilization (CaiGuanShui [2010] No. 50);

3) China's Notice on Adjusting Lists Related to the Provisional Regulations for Import Taxation on Major Technical Equipment as 3 Generation Nuclear Power Generator Units (CaiGuanShui [2011] No. 45)

Annexes:

1. Catalog of Major Technical Equipment & Products Supported by the State (2012 revision) (omitted)

2. List of Key Parts & Raw Materials Imported for Major Technical Equipment & Products (2012 revision) (omitted)

3. Catalog of Major Technical Equipment & Products Not Exempt from Import Taxes (2012 revision)

4. Report on Implementation of Import Taxation Policies for Major Technical Equipment Enterprises (omitted)

The Ministry of Finance of China

The Ministry of Industry and Information Technology of China

The General Administration of Customs of China

The State Administration of Taxation of China

March 7, 2012