From April 1, 2024, to March 31, 2025, enterprises registered in the China (Shanghai) Pilot Free Trade Zone and the Lingang New Zone shall be exempted from paying stamp tax on contracts of sale and purchase for offshore trade business, according to a notice released by the Ministry of Finance (MOF)and the State Administration of Taxation (SAT) , named by the Notice on the Preferential Stamp Duty Policy for Offshore Trade in the China (Shanghai) Pilot Free Trade Zone and the New Port Area.(Cai Shui [2024]No.8)
Offshore trade, or documentation processing trade, refers to a trade model in which the goods are transferred directly from the exporting country to the importing country without entering the border of a middle country.
Without such preferential tax policy, according to the Stamp Duty Law of the People's Republic of China, when an enterprise engages in offshore resale trading, the stamp duty shall be levied on the contracts of both purchases and sales according to 0.03% of the contract amount. This will have no small impact on the profits of offshore trading companies.
This is the first preferential tax policy issued and implemented by China for offshore business, and the first trial in Shanghai means that China has taken a substantial first step in the exploration and practice of offshore tax system. The introduction of this preferential policy will enhance the confidence of offshore trade enterprises newly settled in Shanghai.
You may click the following link for the full contents of Notice No.8: https://www.gov.cn/zhengce/zhengceku/202402/content_6931760.htm