Hainan Free Trade Port Unveils Tax Policies for Zero-Tariff Goods

Strategic Insights -

China's Hainan Free Trade Port is taking a significant step towards trade liberalization with the introduction of new tax policies. Benefiting from these policies are enterprises and institutions, which are exempt from importing taxes on 'zero-tariff' goods imported through the 'First Line' and circulating among themselves. However, supplementary import taxes will be levied on 'zero-tariff' goods entering the mainland through the 'Second Line' and circulating to non-beneficiary entities and individuals.

Key Takeaways:

  • The Ministry of Finance, General Administration of Customs, and State Taxation Administration jointly issued tax policies for the Hainan Free Trade Port, aimed at promoting its construction and trade liberalization.
  • Beneficiary entities, including enterprises and institutions, are exempt from import taxes on 'zero-tariff' goods imported through the 'First Line' and circulating among themselves.
  • Supplementary import taxes will be levied on 'zero-tariff' goods entering the mainland through the 'Second Line' and circulating to non-beneficiary entities and individuals.
  • The policy stipulates a 'first line' for goods between Hainan Free Trade Port and other countries and regions outside of China, and a 'second line' for goods between Hainan Free Trade Port and other regions within China.
  • Beneficiary entities will include independent legal entities, qualified public institutions, and private non-enterprise units in the Free Trade Port.
  • The scope of 'zero-tariff' commodities will be expanded to about 6,600 tariff items, covering 74% of all goods.
  • The policy is expected to significantly improve the level of liberalization and facilitation of goods trade in Hainan Free Trade Port.

Statistics:

  • 74% of goods will be exempt from tariffs under the new policy.
  • 6,600 tariff items will be covered under the 'zero-tariff' provisions.
  • The policy aims to reduce production costs for enterprises on the island.
  • The policy will stimulate market vitality and improve the level of liberalization and facilitation of goods trade in Hainan Free Trade Port.

Sources:

  • Ministry of Finance of the People's Republic of China
  • July 23 -- Ministry of Finance of the People's Republic of China issued the following news release (no date)
  • Contify.com (Note: Original Press Release date is July 23, but no specific date is mentioned)