Notice of the General Administration of Customs on Issuing the Provisional Measures for the Collection and Administration of Taxes on Domestic Sales of Value-added Goods Processed in Yangpu Bonded Port Area

Article 1 In order to implement the Overall Plan for the Construction of Hainan Free Trade Port and give full play to the pioneering role of Yangpu Free Trade Port, these Measures are formulated in accordance with the Customs Law of the People's Republic of China, the Measures of the Customs of the People's Republic of China on the Supervision of Yangpu Free Trade Port and other relevant regulations, and with the approval of the State Council.
Article 2 The encouraged industry enterprises referred to in these Measures refer to enterprises whose main business is the industrial projects specified in the Catalogue of Encouraged Industries of Hainan Free Trade Port, and whose main business income accounts for more than 60% of the total enterprise income. Encouraged industry enterprises shall be registered in Yangpu Free Trade Port, have independent legal person status, and be filed with the Management Committee of Yangpu Economic Development Zone (hereinafter referred to as "filed enterprises").
The imported materials referred to in these Measures refer to goods that have entered the zone from abroad without going through import tax formalities.
The processing value-added exceeding 30% referred to in these Measures refers to the value-added part of the manufacturing and processing of goods containing imported materials by the registered enterprises in Yangpu Free Trade Port, which exceeds 30% (including 30%, the same below) of the total value of imported materials and materials purchased outside the domestic zone.
Article 3 The Yangpu public information service platform established by Hainan Province shall meet the requirements for the registration of encouraged industrial enterprises and the handling of related business related to processing and value-added. The Yangpu public information service platform implements the "one enterprise, one account" management system. The registered enterprises shall be connected to the platform in accordance with the methods and data standards approved by the customs, and the information and data reported shall be true, accurate, valid and traceable, and meet the requirements of customs tax collection and subsequent supervision. The customs shares the relevant information required for enterprise registration and customs tax collection and subsequent supervision with the Yangpu Economic Development Zone Management Committee and relevant departments of Hainan Province through the Yangpu public information service platform.
Article 4 Goods produced by encouraged industrial enterprises in Yangpu Bonded Port Area that contain imported materials and have a processing value-added of more than 30% are exempted from import tariffs when they are sold domestically outside the zone, and import value-added tax and consumption tax are levied in accordance with regulations.
For goods produced by encouraged industrial enterprises in Yangpu Bonded Port Area that contain imported materials but have a processing value-added of less than 30%, if they are sold domestically outside the area, they can enjoy the current policy of selective tariff collection for domestic sales in comprehensive bonded areas. They can apply for tariff collection based on the corresponding imported materials or the actual inspection status (finished products), and collect import value-added tax and consumption tax in accordance with regulations.
Article 5 The calculation formula for processing value-added exceeding 30% is: [(goods domestic sales price outside the area - Σ overseas imported materials price - Σ domestic and foreign purchase materials price) / (Σ overseas imported materials price ' Σ domestic and foreign purchase materials price)] × 100% ≥ 30%. The determination of the relevant prices in the calculation formula shall refer to the relevant provisions of the "Measures for the Customs to Determine the Dutiable Price of Bonded Goods for Domestic Sales" (Order No. 211 of the General Administration of Customs) and the "Measures for the Customs to Determine the Dutiable Price of Imported and Exported Goods" (Order No. 213 of the General Administration of Customs). Among them:
(i) The price of goods sold out of the zone for domestic sale shall be determined based on the transaction price of the goods manufactured and processed containing imported materials sold by the registered enterprise to the domestic and foreign areas;
(ii) The price of imported materials from abroad shall be determined based on the transaction price of the materials imported by the registered enterprise from abroad, and shall include the transportation and related costs and insurance premiums of the materials before unloading at the domestic import location;
(iii) The price of materials purchased outside the domestic zone shall be determined based on the transaction price of the materials purchased by the registered enterprise from the domestic and foreign areas, and shall include the transportation and related costs and insurance premiums of the materials to the Yangpu Bonded Port Area.
Article 6 If the registered enterprise applies for exemption from import tariffs for the domestic sale of processed value-added goods, it shall accurately calculate and truthfully declare the processing value-added of the goods sold out of the zone for domestic sale, be responsible for the self-reported data, and bear the corresponding legal liability. The registered enterprise shall go through the processing value-added declaration procedures with the customs in accordance with regulations before the relevant goods are sold out of the zone for domestic sale. If the value-added of processing exceeds 30%, the customs system will automatically generate a confirmation number for the exemption of import tariffs for domestic sales of the processed value-added goods, and the registered enterprise will inform the domestic import enterprises outside the zone of the number.
The domestic import enterprises outside the zone shall go through the import declaration procedures with the customs according to the regulations and pay the relevant taxes by themselves with the confirmation number of the exemption of import tariffs for domestic sales of processed value-added goods. Fill in "processing value-added goods" in the exemption column of the customs declaration form, and fill in the corresponding exemption confirmation number of the goods in the registration number column.
Article 7 This policy applies to the domestic sales of goods with an overall value-added of more than 30% in the deep processing transfer in the Yangpu Free Trade Port Area.
Article 8 The customs shall conduct random inspections and audits on the processing value-added ratio and price, classification, origin and other tax-related elements declared by the enterprise based on risk analysis.
Article 9 The customs shall conduct audits (verifications) on enterprises in accordance with the law.
Article 10 When goods with processing value-added exceeding 30% are sold domestically outside the zone, they shall not be exempted from import tariffs if any of the following circumstances exist:
(i) The imported materials from abroad are commodities subject to tariff quota management;
(ii) They have only undergone one or more minor processing or treatments such as mixing, repackaging, splitting, combined packaging, sharpening, simple grinding or simple cutting;
(iii) Other goods that should be subject to import tariffs according to relevant regulations.
Article 11 Goods produced by registered enterprises in Yangpu Free Trade Port Area that do not contain imported materials and are sold domestically outside the zone shall be exempted from import tariffs, and import value-added tax and consumption tax shall be levied in accordance with regulations. The relevant provisions of these Measures shall apply to their customs tax collection and management matters.
Article 12 Any violation of the provisions of these Measures that constitutes smuggling or violation of customs supervision regulations, as well as any violation that is subject to administrative penalties by customs as provided for by laws and regulations, shall be punished by customs in accordance with the provisions of relevant laws and regulations; if it constitutes a crime, criminal liability shall be investigated in accordance with the law.
Article 13 The General Administration of Customs shall be responsible for interpreting these Measures.
Article 14 This measure shall be implemented simultaneously with the launch of the Yangpu public information service platform and the Haikou Customs information system, and shall be abolished on December 31, 2024.