January 2024 / China

The Ministry of Finance (MOF) released on December 29, 2023 the Import and Export Tariffs of the People's Republic of China (2024 Version), which will take effect on January 1, 2024. It is clarified that laws and regulations that stipulate otherwise on the import and export tax items and rates will prevail.

Import tariffs include the table of tax items and rates, the general classification rules, notes to the categories, notes to chapters, notes to subitems, and notes to domestic subitems. The table of tax items and rates includes columns for serial number, tariff codes, goods names, most-favored-nation tax rates, agreed tax rates, preferential tax rates and general tax rates. It has integrated the adjustments made by the Customs Tariff Commission of the State Council on tariff items, most-favored-nation tax rates, agreed tax rates, preferential tax rates, general tax rates and relevant provisional tax rates, as well as the notes to domestic subitems in its No.10 (2023) Announcement.

Shanghai Municipal People's Government released on January 10, 2024 the Several Measures on Promoting the High-quality Development of the Equity Investment Sector in Shanghai, which will take effect on February 1, 2024 and remain effective until January 31, 2029.

The document rolls out 32 measures in nine aspects. The document calls for implementing favorable fiscal and tax policies. They include putting in place favorable tax policy in venture capital investment sector, aligning with and implementing preferential tax policy for the accounting of a single investment fund of a partnership venture capital enterprise, and implementing preferential corporate income tax policy for corporate venture capital enterprises in Pudong New Area. For an income derived from transfer of equity held for over three years, the corporate income tax for the year would be halved as per the proportion of shares held by individual investors at the end of the year if the income represents more than 50 percent of the total income derived from equity transfer in the year. The tax would be waived for transfer of equity held for more than five years.

The Ministry of Finance, General Administration of Customs and State Taxation Administration jointly released on January 3, 2024 the Circular on the Tax Policies for Entry and Exit of Goods in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (Hengqin Cooperation Zone) and the Circular on the Tax Policies for Personal Baggage and Delivery Items in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin.

According to the documents, there would be a "first line" created between the Hengqin Cooperation Zone and the Macao Special Administrative Region, and the "second line" between the Hengqin Cooperation Zone and the territory of the mainland China. For qualified goods entering into the Hengqin Cooperation Zone through the "first line", the tax would be exempted, while goods falling under other circumstances would be subject to the bonded policies. For 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 through the "second line" would be waived from the import duties, but the import value added tax and consumption would be levied as required. Goods entering into the Hengqin Cooperation Zone from the mainland through the "second line" would be regarded as exports and are eligible for refunds of value added tax and consumption tax according to rules. The document also calls for tightening the supervision.

Source: Announcement of the State Taxation Administration

The Tariff Law (Draft) is under public comment during the period from December 29, 2023 to January 27, 2024, according to a statement made on the website of the National People's Congress (NPC).

The draft law has 70 articles in seven chapters, which include General Provisions, Tax Items and Rates, Tax Payable, Tax Incentives and Tariffs under Special Situations, Collection Management, Legal Responsibilities, and Supplementary Provisions. It also includes the Import and Export Tariffs of the People's Republic of China as an annex.

It clarifies that there are seven categories of imports and exports and inbound articles that are legally exempted from tariffs. They are goods in a single consignment within the quota of exemption as stipulated by the State Council, advertisements and samples with no commercial value, necessary fuel, materials and catering supplies that are carried by inbound and outbound means of transport, goods and inbound articles damaged or lost before customs release, materials donated by foreign governments and international organizations, and goods and inbound articles exempted from tariffs under international treaties and agreements concluded or jointly participated in by China.