General Administration of Customs Adjust Tax Exemption Scope for Complete Set of

To guarantee uniform and normalized execution of the specific import tax policy on key technical equipment issued by the General Administration of Customs, recently, the General Administration of Customs issued the “Adjustment on Tax Exemption Policy for Import of Complete Set of Key Technical Equipment”.

Concretely speaking, from September 15 this year, any processing trade enterprise importing the complete set of technical equipment listed on relevant announcements of General Administration of Customs in mode of non-cost equipment provided by foreign businessmen under the processing trade item shall be taxed in accordance with relevant regulations. The customs will reject any application for processing trade manual filing or increase to product items. The import of complete set of key technical equipment listed on the Announcement (No.: [2008] 29) issued by General Administration of Customs shall be taxed according to the Announcement but may be exempted of value added tax for import.

At the same time, if any foreign-funded enterprise importing complete set of key technical equipment listed on relevant policies of General Administration of Customs with its own capitals applies for tax reduction or exemption, the customs shall reject such application from September 15. However, if any foreign-funded enterprise importing complete set of key technical equipment listed on relevant policies of General Administration of Customs with its own capitals applies for tax reduction or exemption before September 15, the customs shall keep all its approved tax exemption procedures valid but not extended.

Any complete set of key technical equipment for dominant industry projects invested by foreign businessmen in middle and western areas of China and foreign government loan and international financial organization loan projects, which have been listed on relevant announcements of customs, will have relevant tax exemption procedures approved before September 15 valid.

According to relevant information, the adjustment of tax exemption policy for import of complete set of key technical equipment mentioned in relevant announcements of General Administration of Customs shall apply to all domestic and foreign-founded projects, non-cost equipment supplied by foreign businessmen under the processing trade item and all equipment transported from special supervision areas of customs to the areas inside China. The foreign-funded projects include predominant industry projects invested by foreign businessmen in middle and western areas of China, foreign government loan and international financial organization loan projects and all project invested by foreign businessmen with its own capitals.