The General Administration of Customs (GAC) released on January 24, 2024 the Measures for the Customs of the People's Republic of China to Levy Taxes on Domestic Sale of Value Added Goods Being Processed in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (Hengqin Cooperation Zone), to be effective on the date when the Zone completes inspection and acceptance of regulatory facilities and starts to implement the tax policies.
Under the MOF, GAC and STA No.1 (2024) Document, for the goods produced by an enterprise in the Hengqin Cooperation Zone that contain imported materials or parts and create added value of 30 percent or above after being processed in the Zone, their entry into the mainland from the Zone would be waived from the import duties, but the import value added tax and consumption tax would be levied as required. The Measures refine the criteria for the implementation of the VAT exemption policy, clarifying that the policy applies to those enterprises that have registered at the Zone with independent legal entity. The Measures also make clarifications on the "creation of added value of 30 percent or above after being processed in the Zone" and the scope of "imported materials or parts".