Notice on the ＂Zero Tariff＂ Policy for Raw Materials of Hainan Free Trade Port

Notice on the "Zero Tariff" Policy for Raw Materials of Hainan Free Trade Port
No.42 [2020] of Finance Tariff

Hainan Provincial Department of Finance, Haikou Customs and State Taxation Administration of The People’s Republic of China Hainan Provincial Taxation Bureau:

In order to implement the "Overall Plan for the Construction of Hainan Free Trade Port", with the consent of the State Council, the "zero tariff" policy for raw materials of Hainan Free Trade Port is hereby notified as follows:

1. Before the whole island is closed, the enterprises registered in Hainan Free Trade Port and with independent legal person status shall be exempted from import duties, import value-added tax and consumption tax when importing raw and auxiliary materials used for production and self-use, production and processing activities in the mode of "two ends out" or service trade in the mode of "two ends out".

Two, "zero tariff" raw materials to implement positive list management, the specific scope of the annex. The contents of the list shall be dynamically adjusted by the Ministry of Finance in conjunction with relevant departments according to Hainan’s actual needs and regulatory conditions.

3. The spare parts listed in the annex shall be subject to the "zero tariff" policy for raw and auxiliary materials, and shall be used for the maintenance of aircraft and ships (including the maintenance of related spare parts). If one of the following conditions is met, import duties, import value-added tax and consumption tax shall be exempted:

(a) used for the maintenance of aircraft and ships (including related parts and components) that enter the territory from abroad and are transported out of the country;

(two) for the maintenance of aircraft operated by aviation enterprises with Hainan as the main operating base (including related parts);

(three) for the maintenance of ships (including related parts) operated by shipping companies registered in Hainan with independent legal personality and taking the ports in Hainan Province as the port of registry.

Four, "zero tariff" raw materials are limited to the production and use of enterprises in Hainan Free Trade Port, subject to customs supervision, and may not be transferred or left the island. If it is really necessary to transfer or leave the island due to bankruptcy and other reasons, it should be approved and go through the formalities of paying taxes. If the goods processed and manufactured with "zero tariff" raw materials are sold on the island or sold to the mainland, it is necessary to pay back the import duties, import value-added tax and consumption tax of the corresponding raw materials, and collect domestic value-added tax and consumption tax according to regulations. The export of goods processed and manufactured with "zero tariff" raw materials shall be implemented according to the current tax policies on export goods.

5. If an enterprise imports raw and auxiliary materials listed in the positive list and voluntarily pays import value-added tax and consumption tax, it may apply at the time of customs declaration.

Six, the relevant departments should strengthen supervision through information technology and other means, prevention and control of possible risks, timely investigate and deal with violations, to ensure the smooth operation of the "zero tariff" policy of raw materials. Relevant departments in Hainan Province should strengthen information interconnection and share regulatory information such as aircraft and ships.

Seven, this notice shall be implemented as of December 1, 2020.

Attachment: List of "Zero Tariff" Raw Materials of Hainan Free Trade Port

Ministry of Finance, General Administration of Customs and General Administration of Taxation
November 11, 2020

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List of "Zero Tariff" Raw Materials in Hainan Free Trade Port