Notice on the Taxation Policy on Imports by Manufacturers of OLED Display Panels

To the General Administration of Customs of China:

I. In accordance with relevant stipulations of the Notice of the Ministry of Finance of China on the Taxation Policy on Imports by Manufacturers of New-type Display Devices (CAIGUANSHUI [2009] No. 31), from January 1, 2009 till December 31, 2011, both import tariff and import value-added tax shall be exempted for manufacturers of organic light emitting diode (OLED) display panels in importing special construction materials for decontamination chambers, supporting systems, and spares & accessories of production equipments that are not domestically available; in regard of the raw materials and consumables that are not domestically available and then imported for importers' own production or research & development, the import tariff shall be exempted, while the import value-added tax shall be levied as stipulated. The operational procedure of the foregoing policy shall be implemented in the light of relevant procedure of the taxation policy on imports by manufacturers of thin-film transistor - liquid crystal displays (TFT-LCD).

II. The Ministry of Finance of China (MOF), in conjunction with other authorities concerned, formulated the Lists of tariff-free raw materials and consumables for importers' own production or research & development, which are hereby promulgated for implementation, details shown in Annex 1 and Annex 2. In the Lists, the closing date of the import tax-exemption policy for some products shall be December 31, 2010 (See the Note in Annex 1).

III. The spare & accessory parts imported free of tax by manufacturers of OLED display panels shall be only used for servicing the production equipments listed in Annex 3 to this Notice, with the annual tax-free import quota calculated and determined by the MOF according to the total price and service life of the production equipments and the servicing empirical formula in Annex 4 to this Notice.

The manufacturers of OLED display panels shall, within the foregoing tax-free import quota, submit the actual list of imported spares & accessories to the Customs authorities for examination and registration for the follow-up supervision by the Customs.

IV. The goods imported free of tax in accordance with this Notice shall be only used for the production, construction and equipment servicing of the manufacturers themselves, and shall not be transferred to other entities or shifted to other uses. Enterprises in violation of the policy shall be disqualified from enjoying it.

V. The manufacturers enjoying the policy shall, prior to December 15 each year, report timely to the MOF on the actual import tax-exemption within the current year of spares & accessories for servicing, and raw materials and consumables for production purpose (including imports list, import value, amount of tax-exemption and the implementation result of the policy, etc.). The MOF will, in conjunction with other authorities concerned and with the development of domestic supporting industries, make timely adjustment on the List of tax-exemption imports subject to the foregoing policy and, on the basis of the actual situation of China's industrial layout and technological progress, reasonably adjust the technological threshold for enjoying such a policy.

Annex 1: List of Tariff-Free Raw Materials Imported by Manufacturers of Organic Light Emitting Diode Display Panels.xls

Annex 2: List of Tariff-Free Consumables Imported by Manufacturers of Organic Light Emitting Diode Display Panels.xls

Annex 3: List of Production Equipments Applicable to Tax-Free Spares & Accessories Imported by Manufacturers of Organic Light Emitting Diode Display Panels.xls

Annex 4: Calculation Formula on Tax-Free Import Quota of Spares & Accessories for Servicing Equipments of Manufacturers of Organic Light Emitting Diode Display Panels.doc

From the Ministry of Finance of China
May 10, 2010