Several measures on piloting international high standards in free trade pilot zones and free trade ports with conditions to promote institutional opening-up

Ministry of Finance Ministry of Ecology and Environment Ministry of Commerce
Announcement of the General Administration of Customs and the State Administration of Taxation
No. 75 of 2023
In order to implement the relevant requirements of the "Several Measures on Piloting International High Standards in Free Trade Pilot Zones and Free Trade Ports with Conditions" (Guofa [2023] No. 9) issued by the State Council, the relevant policies and measures are hereby announced as follows:

I. Temporary Exit for Repair

(I) For the following aircraft and ships (including related parts) operated by enterprises registered with independent legal person status in Hainan Free Trade Port, they will be exempted from customs duties after temporary exit for repair and then re-entered into Hainan Free Trade Port, regardless of whether they have added value, and import value-added tax and consumption tax will be levied in accordance with regulations. Specifically:

1. Aircraft (including related parts) operated by aviation enterprises with Hainan Free Trade Port as the main operating base.

2. Ships (including related parts) operated by shipping companies with ports in Hainan Free Trade Port as their port of registry.
(II) The list of enterprises that meet the conditions for enjoying the policy measures shall be determined by the competent departments of transportation, market supervision, maritime affairs, etc. of Hainan Province in conjunction with the Department of Finance, Department of Ecology and Environment of Hainan Province, Haikou Customs, and Hainan Provincial Taxation Bureau of the State Administration of Taxation, and shall be dynamically adjusted and notified to Haikou Customs by letter.
(III) Aircraft and ships (including related parts) that enjoy duty-free transportation after temporary repair abroad and re-entry into Hainan Free Trade Port shall only be operated and used by enterprises that meet the conditions for policy measures and shall be subject to customs supervision; they shall not be transferred or used for other purposes without the consent of the customs and the payment of import tariffs. The transfer of the above-mentioned aircraft and ships (including related parts) shall be subject to domestic value-added tax and consumption tax in accordance with the regulations.
Enterprises that meet the conditions for enjoying the policy measures shall establish an information management system for temporarily outbound repair goods that meets the requirements of customs supervision, and manage and use the goods that are temporarily outbound for repair and re-entered in accordance with the requirements of the policy measures and relevant regulations.
(IV) The Ministry of Commerce and Finance, the Ministry of Ecology and Environment, the General Administration of Customs, the State Administration of Taxation, and relevant industry authorities of Hainan Province shall formulate supporting management measures to clarify the procedures for determining the list of enterprises that meet the conditions of the policy measures, the registration, operation and self-use, supervision and other regulations of aircraft and ships (including related parts) that enjoy duty-free transportation after temporary exit for repair and then re-entering the Hainan Free Trade Port, as well as the standards for handling violations and punishment measures.

At the same time, the relevant departments of Hainan Province should strengthen supervision, prevent and control risks, and promptly investigate and deal with violations through information technology and other means, and strengthen the interconnection of information among the competent departments in the province to share information such as the supervision of enterprises and related aircraft and ships (including related parts) that meet the conditions of the policy measures.
(V) The period of "temporary exit" referred to in these policy measures shall be determined by the customs based on the cargo repair contract submitted by the enterprise and the actual situation. For goods that are re-entered after exceeding the "temporary exit" period, import taxes shall be levied on them in accordance with the taxation management regulations for general imported goods.

II. About temporary entry for repair

(I) In the special customs supervision areas (hereinafter referred to as pilot areas) where Hainan Free Trade Port implements the "first line" liberalization and "second line" import and export management system, for goods temporarily allowed to enter the pilot areas from abroad for repairs from the date of implementation of this announcement, the goods re-exported are exempted from customs duties, import value-added tax and consumption tax; if they are not re-exported and converted to domestic sales, they shall go through the import procedures as required, and import tariffs, import value-added tax and consumption tax shall be collected according to the actual inspection status of the repaired goods.

(II) This policy measure is only applicable to Yangpu Bonded Port Area, Haikou Comprehensive Bonded Zone, Haikou Airport Comprehensive Bonded Zone, and other special customs supervision areas in Hainan Free Trade Port approved by the State Council.
(III) The scope of goods for the above-mentioned repair business includes: 1. Goods in the comprehensive bonded area repair product catalog formulated by the Ministry of Commerce, the Ministry of Ecology and Environment, and the General Administration of Customs; 2. Goods that can carry out bonded repair business in accordance with the provisions of the "Notice of the Ministry of Commerce and 6 other units on the pilot relaxation of some import and export goods management measures in the Hainan Free Trade Port" (Shang Zimaofa [2021] No. 264); 3. Other goods that are allowed to carry out bonded repair in the Hainan Free Trade Port Customs Special Supervision Area in accordance with relevant regulations.

Except as permitted by laws, administrative regulations, regulations of the State Council, or regulations made by relevant departments of the State Council in accordance with laws and administrative regulations, the pilot area shall not carry out repair business for goods prohibited from import and export by the state, and shall not carry out dismantling, scrapping and other businesses through repair.
(IV) Goods in the above-mentioned repair product catalogue are allowed to be sold domestically after being repaired and verified by the license documents. However, goods that are prohibited from import by the state or restricted import without permission should be re-exported after repair and shall not be sold domestically through the "second line"; old and damaged parts replaced during the repair process of repair goods, as well as scraps generated during the repair process, shall not be sold domestically through the "second line".
(V) Enterprises in the pilot area shall apply to carry out the above-mentioned repair business. The management committee of the customs special supervision area where the enterprise is located shall jointly study and determine the list of pilot enterprises together with the commerce, ecological environment, and competent customs, and report to the Hainan Provincial Commerce, Ecological Environment and Haikou Customs for filing.
(VI) Enterprises enjoying policy measures should establish an information management system that meets the requirements of customs supervision, which can realize the full process tracking of repair consumption and other information, and carry out special management of the goods to be repaired, the damaged parts replaced during the repair process, the scraps generated during the repair process, and the waste materials after the repair.
(VII) The Ministry of Commerce, Ministry of Ecology and Environment, General Administration of Customs, Ministry of Finance, State Administration of Taxation and other departments of Hainan Province shall formulate supporting supervision plans to clarify the management of inbound repair goods, standards for handling violations, and punishment methods.
At the same time, relevant departments of Hainan Province should strengthen supervision, prevent and control risks, and promptly investigate and deal with violations through information technology and other means, and strengthen information interconnection among competent departments within the province to share information such as supervision of enterprises that meet the conditions of policy measures and repair goods.
(VIII) Bonding shall be implemented for goods that temporarily enter the pilot area from abroad for repair. Customs shall handle procedures in accordance with the bonded maintenance method and implement supervision.

III. Regarding temporarily imported goods

(I) For the following goods that temporarily enter the Shanghai, Guangdong, Tianjin, Fujian, Beijing Free Trade Pilot Zone and Hainan Free Trade Port from abroad, if the taxpayer pays a deposit equivalent to the tax payable or provides other guarantees to the customs upon entry, customs duties, import value-added tax and consumption tax may be temporarily exempted:

1. Professional equipment necessary for temporary entrants to carry out business, trade or professional activities in accordance with the laws of my country (including software, instruments, equipment and supplies for news reporting or filming movies and TV programs, etc.).

2. Goods used for exhibitions or demonstrations.

3. Commercial samples, advertising films and recordings.

4. Sports equipment necessary for sports competitions, performances or training, etc.

(II) The above-mentioned goods are limited to use in the pilot areas specified in this policy, and shall not be used for commercial purposes such as sale or lease during the temporary entry period, and shall be re-exported within 6 months from the date of entry; if the re-export period needs to be extended, the taxpayer shall go through the extension procedures with the customs in accordance with the regulations of the General Administration of Customs.
(III) If the above-mentioned goods are not re-exported within the prescribed period, the import formalities shall be handled as required, and the customs shall collect import tariffs, import value-added tax and consumption tax in accordance with the law.
(IV) For customs affairs guarantee business, it shall be implemented in accordance with the relevant provisions of customs affairs guarantee.
This announcement shall be implemented from the date of publication. For imported goods that have been taxed before the announcement, the relevant taxes will no longer be refunded.
Ministry of Finance Ministry of Ecology and Environment Ministry of Commerce
General Administration of Customs State Administration of Taxation
December 27, 2023