China Adjusts Catalog and List Attached to Import Taxation Provisions for Major

It is learned from the Ministry of Finance of China that the Ministry of Finance, the General Administration of Customs of China, and the State Administration of Taxation of China had recently jointly issued a notice regarding the adjustment of equipment catalog and commodity list attached to China's Interim Provisions for Import Taxation on Major Technical Equipments.

The Ministry of Finance indicated that the adjustment was made pursuant to the Notice Jointly Issued by the Ministry of Finance, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, the State Administration of Taxation and the National Energy Administration on Adjusting the Import Taxation Policy for Major Technical Equipments.

In accordance with the Notice, the Catalog of Major Technical Equipments and Products Supported by the State for Development (Revised in 2010) and the List of Key Components, Parts And Raw Materials Imported for Major Technical Equipments and Products (Revised in 2010) shall take effect as of April 25, 2010, with commodities conforming to the prescribed conditions to be exempt from both tariff and import value-added tax.

The Catalog of Major Technical Equipments and Products Not Exempt from Import Taxation (Revised in 2010) shall come into force as of April 25, 2010. Taxation shall apply to the import of any items listed under Article 3 of the new Interim Provisions and of the technology, accessories and spare-parts conforming to prescribed conditions. The foregoing items and equipments approved before April 25, 2010 (excluded) shall continue conforming to relevant appendixes to the original Interim Provisions before October 25, 2010; And as of October 25, 2010 (included), taxation shall apply to the import of all of them.

According to the Notice, new applicant enterprises shall submit documents of application from April 25, 2010 to May 25, 2010 for enjoying taxation preference for the import concerning urban railway transit vehicles and mechanical & electrical equipments, high-speed motor train units, high-power locomotives, large railway maintenance machinery, large equipments for environmental protection and resource comprehensive utilization, and large construction machinery as well, with the specific application procedures and requirements implemented in accordance with the new Interim Provisions. As of April 25, 2010, with certification documents issued by relevant administrations, new applicant enterprises can apply to China Customs authorities for an advance clearance of imported components, parts and raw materials based on the Tax Guarantee.

As from July 1, 2009, the import tariff and import value-added tax should be exempted for key components, parts and raw materials imported for urban railway transit vehicles and mechanical & electrical equipments owned by the proprietors undertaking self-reliance projects in the urban railway transit sector.

To enjoy the taxation preference on the import of major technical equipments, the self-reliance project proprietors in the urban railway transit and nuclear power sectors can submit their application respectively to the National Development and Reform Commission and the National Energy Administration after the finalization of project plans on importing materials. To apply for enjoying in 2010 the taxation preference, the project proprietors in aforesaid fields shall submit their application prior to May 25, 2010.

The Notice also points out that, the application conditions for such fields as wind power generators (sets) and their components, and numerical control equipments and their functional units have been adjusted in the Catalog of Major Technical Equipments and Products Supported by the State for Development (Revised in 2010) to meet the development of related domestic industries. For enterprises in such fields identified eligible during the second half of 2009, their tax-exemption status formerly identified should be valid prior to April 25, 2010 if relevant requirements for technical specifications or sales performance on their equipments enjoying the preferential policy are to be adjusted as per the Appendix 1 of the Notice.