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| Procedures of The Customs of The People's Republic of China For The Supervision of and The Imposition of or Exemption from Tax on Imports and Exports by Overseas Investment Buseinesses |
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| 2004-12-15 17:19 |
(Valid From:1992.09.01)
(Order 29 of the General Administration of Customs)
CHAPTER 1 GENERAL PROVISIONS
CHAPTER 2 PROCEDURES FOR THE RECORD AND PASSING EXAMINATION
CHAPTER 3 TAX REGULATIONS FOR IMPORTS AND EXPORTS
CHAPTER 4 CONTROL AND CHECKING OUT OF BONDED IMPORTED MATERIALS, DEVICES
CHAPTER 5 MORTGAGE AND BANKRUPTCY, SETTLEMENT
CHAPTER 6 SUPPLEMENTARY ARTICLES
CHAPTER 1 GENERAL PROVISIONS
Article 1. These procedures are formulated according to the Customs Law of the People's Republic of China (PRC) and other related laws and regulations for encouraging foreign companies, businesses and other economic organizations or individuals to come to China and establish Chinese-overseas joint ventures, cooperative businesses and wholly overseas-funded businesses (hereafter referred to as the "overseas investment businesses"), for carrying through the State's property policy, developing the national economy, facilitating legitimate importation and exportation, and strengthening supervision by the Customs.
Article 2. Overseas investment businesses should fulfill various obligations according to the laws and regulations of the People's Republic of China and to these Procedures. They should declare their imports or exports accurately to the Customs and accept its supervision, then enjoy relevant preferential treatment.
Article 3. The Customs will confer the title of "Credible Enterprise" on those overseas investment businesses that observe the Customs regulations well and after they are checked and confirmed. They shall enjoy convenience in going through the formalities at the Customs.
Article 4. Overseas investment businesses that conform to the Customs supervision conditions can obtain approval for establishing bonded warehouses and bonded factories. When necessary, the Customs can send officers to station in overseas investment businesses for exercising supervision and performing the Customs formalities. The related businesses should provide the necessary convenience.
Article 5. Without permission of the Customs, goods imported by overseas investment businesses that are subject to supervision by the Customs according to the Customs Law of the People's Republic of China, are not allowed to be sold, transferred, mortgaged, or used for other purposes.
CHAPTER 2 PROCEDURES FOR THE RECORD AND PASSING EXAMINATION
Article 6. Overseas investment businesses should apply to the Customs of the related locality for business registration and for the record. They must show the approval certificate signed by the departments in charge of foreign economic relations and trade of the People's Republic of China or by their authorized organs, copies or duplicates of the business license and other papers signed by the PRC industrial and commercial administrations or their authorized organs, as well as their business contracts and articles of association.
Article 7. Investors of the overseas investment businesses should pay the investment funds according to the contracts and articles of association and related State regulations. Within one month after the funds are accepted, they must submit the funds acceptance report to the Customs.
Article 8. When overseas investment businesses apply to the Customs for importing or exporting goods, they should fill in import or export customs declaration forms specially provided them and submit these forms to the Customs together with the bills of goods and packing lists. They should also submit import or export permits to the Customs for merchandise that has to be applied for permits according to State regulations. Merchandise that needs no permits shall be checked and cleared by the Customs according to the papers approving the establishment of the businesses or to the import and export contracts.
A reasonable amount of self-use goods imported by overseas investment businesses shall be exempted from application for approval and from import license.
Article 9. When overseas investment businesses buy and export goods not produced by themselves to balance their foreign exchange revenue and expenditure, the Customs shall examine the approval papers of the departments in charge of foreign relations and trade. They should apply for export permits for the goods that are subject to the State export permit control, and the Customs shall let them pass accordingly.
Article 10. Before importing their goods, overseas investment businesses should take a detailed list of goods of the approved contractual equipment to the Customs and go through the formalities of paying tax or exempting from tax. After approval, the Customs shall issue them a "PRC Customs Certificate of Imposing or Exempting from Tax on Goods Imported by Overseas Investment Businesses." (hereafter referred to as "Imposing or Exempting from Tax Certificate") At the entry of the goods, the businesses should show the "Imposing or Exempting from Tax Certificate" and apply to the Customs.
The "Imposing or Exempting from Tax Certificate" is valid for a term of three months. This term can be extended under special circumstances with the approval of the Customs. The maximum extended period is three months.
The above-mentioned goods to be taxed or exempted from tax can be examined and passed by the Customs in charge or by the entry Customs. The last part of the triplicate form of the "Imposing or Exempting from Tax Certificate" should be returned to the Customs in charge within one month after the goods are examined and let pass.
Article 11. Overseas investment businesses that execute contracts for exporting their products shall obtain from the Customs a "PRC Customs Registration Manual of Importing Materials and Devices Needed by Overseas Investment Businesses that Execute Contracts for Exporting their Products and of Exporting the Products after Processing." (hereafter referred to as "Registration Manual")
When overseas investment businesses carry out contracts for exporting products and import needed raw materials, fuel, separate devices, spare parts, components, accessories, subsidiary materials, and packaging materials, the Customs shall supervise them as bonded goods. Their importation shall be exempted from import permits. The Customs shall examine and let them pass according to the business contract or import and export contract.
When overseas investment businesses export products they have processed that are subject to the State export permit control, the Customs shall examine and let them pass according to the export permit.
CHAPTER 3 TAX REGULATIONS FOR IMPORTS AND EXPORTS
Article 12. When overseas investment businesses import goods within the stipulated total investment or the additional investment approved, they can enjoy tax-reduction or tax-free treatment granted by the Customs. If the imported goods exceed the investment, they shall be taxed according to regulations.
Article 13. The following goods imported by Chinese-overseas joint ventures shall be exempted from Customs duty and industrial and commercial consolidated tax:
(1) Machinery equipment, spare parts and components, as well as other things ("other things" means materials needed for building plants and installing and reinforcing machinery; similarly hereafter) specified by the contract as investment of the overseas partner;
(2) Machinery equipment, spare parts and components, as well as other things within the total investment funds;
(3) Machinery equipment, spare parts and components, as well as other things bought with additional investment that domestic industries cannot supply.
Article 14. When overseas investment businesses import goods specified by Article 13 and the related production management equipment, they shall be exempted from import duties and industrial and commercial consolidated tax.
Article 15. When Chinese-foreign cooperative businesses import machinery, equipment, spare parts and materials for exploring for and tapping offshore oil, when they import spare parts and components and materials for making machinery and equipment for the purpose of development, and when they make use of overseas funds to import machinery equipment and necessary materials for building plants and installing and reinforcing machinery equipment in order to launch projects of energy development; railroad, highway and port capital construction; industry; agriculture, forestry; animal husbandry; aquaculture; deep-sea fishing; scientific research; education; and health and medicine, they shall be exempted from import duties and industrial and commercial consolidated tax.
Article 16. When Chinese-overseas cooperative commercial businesses, catering trades, photo studios, other services, repair centers, workers and staff training institutions, passenger and cargo motor transportation companies, coastal fishing companies, and other trades import goods, they shall pay import duties and industrial and commercial consolidated tax according to regulations, except for cases with State stipulations.
Article 17. When overseas investment businesses import a reasonable amount of self-use motor vehicles, vehicles for production, and office articles (equipment), they shall be exempted from import tariffs and industrial and commercial consolidated tax.
Article 18. The Customs shall specify the period of supervision over goods that enjoy tax reduction or exemption as stipulated in Articles 13, 14, 15 and 17. The supervision period begins from the day when the imported goods are let pass.
The specific terms of supervision over imported goods given preferential tax treatment are as follows:
(1) Ships, aircraft, and building materials (including rolled steel, timber, plywood, artificial board, and glass), 8 years;
(2) Motor vehicles, electric appliances, 6 years;
(3) Machinery equipment, other equipment, materials, 5 years.
For tax-reduction and tax-free goods that go beyond the terms of the Customs supervision, the businesses can apply to the Customs for lifting the supervision, and after approval by the Customs in charge, they shall be given a "PRC Customs Supervision-Lifting Certificate for Tax-Reduction and Tax-Free Goods Imported by Overseas Investment Businesses."
When tax-reduction and tax-free imported goods within the supervision term are allowed by the original approval department to be sold or resold in China, the Customs shall appraise their value by the method of depreciation according to utilization time and impose import tariffs.
For tax-reduction and tax-free imported goods not listed in the Customs supervision term, the Customs shall appraise their value according to circumstances of utilization and impose import tariffs.
Article 19. When overseas investment businesses execute contracts for exporting products and need to import a reasonable amount of materials for processing products for export, such as catalytic agents, abrasives, and fuel, they shall be exempted from import tariffs and industrial and commercial consolidated tax.
Article 20. In observing contracts for exporting products, overseas investment businesses may, in the course of production, produce substandard goods and leftover bits and pieces, which are sold at home. After verification, the Customs shall impose additional tax at its discretion. Waste products that are definitely useless shall be exempted from additional tax.
Firing test materials imported by overseas investment businesses shall be taxed at entry according to regulations.
Article 21. When overseas investment businesses import materials and devices for processing products for the home market with the approval of the department in charge of foreign economic relations and trade, they must pay tax according to regulations.
Article 22. When overseas investment businesses export their own products, they shall be exempted from export tariffs, except for export-restricted merchandise or goods for which the State has laid down other regulations.
CHAPTER 4 CONTROL AND CHECKING OUT OF BONDED IMPORTED MATERIALS, DEVICES
Article 23. Overseas investment businesses should keep a special account book required by the Customs for importing bonded imported materials and devices (hereafter referred to as "materials and devices"), storing them, using them or transferring them to factories to be processed, storing the processed products, exporting the products, or selling them at home. They should regularly tabulate them and report to the Customs for checking out.
Article 24. When overseas investment businesses import materials and devices, they should process them into finished products within one year from the entry date and fulfill the related contract for exporting products, except for special reasons with the approval of the Customs.
If overseas investment businesses sell the imported materials, devices and the processed products at home for some reason, they should obtain approval by the department in charge of foreign economic relations and trade and pay additional tariff and industrial and commercial tax to the Customs on the related imported materials and devices before they sell the goods at home. They should also show import permits for materials and devices subject to permit control.
Article 25. Overseas investment businesses are not allowed to directly transfer their imported materials and devices to plants for processing. If they have to do so under special circumstances, they should report to the Customs beforehand and obtain approval. Within the time limit set by the Customs, they must take back the finished products and semi-finished products from the plants.
If overseas investment businesses do not directly export the finished or semi-finished products processed from imported materials and devices but sell them or transfer them to another business, which reprocess them or assemble them for export, the importer business and the reprocessing business should take the sales contract or processing contract they have signed and other papers to the Customs and go through the formalities of transference and checking out.
Article 26. Within one month from the day of exporting the last batch of finished products, overseas investment businesses should take the "Registration Manual" and customs exports declaration to the Customs and go through the formalities of checking out the materials and devices under the import contract.
Article 27. If overseas investment businesses change their plants, or make transfers, or terminate their contracts after importing materials and devices, they should report to the Customs in time and go through the related formalities.
CHAPTER 5 MORTGAGE AND BANKRUPTCY, SETTLEMENT
Article 28. If overseas investment businesses want to mortgage goods under Customs supervision to domestic or foreign financial organizations for loans, they must apply to the Customs in charge beforehand and obtain approval before they go through the procedures for mortgage.
In actually handling the above-mentioned mortgaged goods, the business should appraise their value by method of depreciation according to the utilization time and pay additional tax to the Customs and go through the necessary formalities.
Article 29. When overseas investment businesses terminate or cancel a contract, they should, within 15 days from the day of approval by the department in charge for clearing property, or within 15 days from the day when the court rules that business bankruptcy goes into effect, take the approval papers (duplicates) issued by the approval department, a statement of the goods to be imposed import tax or exempted from import tax, the Customs "Tax and Tax-free Certificate" and "Registration Manual" to the Customs in charge, and go through the formalities of closing the case. The business should return the related papers such as the "Customs Declaration Registration Certificate" and "Customs Declaration Person Certificate."
Before conducting the above procedure for closing the case, the Customs should seal the related imported materials and equipment and keep them in custody.
Article 30. Before property liquidation, the bankrupt overseas investment business should, according to State regulations, pay tax on their goods under supervision that enjoy preferential tax treatment given by the Customs.
Article 31. For overseas investment businesses that have terminated or canceled their contracts, the Customs shall handle their tax-reduction and tax-free imported goods within its supervision term according to the following regulations:
(1) The Customs shall appraise the value of goods by method of depreciation according to the utilization time and impose additional tax on those goods left for the Chinese partner to continue to use or transferred or sold to domestic units.
(2) If the goods are transferred to other overseas investment businesses in China that enjoy similar preferential treatment, the other businesses can continue to enjoy a reduction in tax on these goods or tax exemption after obtaining approval from the department in charge and going through the formalities of goods transfer at the Customs.
(3) With the approval of the Customs, the overseas partner is allowed to ship abroad the original tax-free imported goods.
Article 32. The above-mentioned overseas investment businesses that go through Customs formalities of winding up business shall receive from the Customs a "Customs Formality Notice of Winding up Business."
CHAPTER 6 SUPPLEMENTARY ARTICLES
Article 33. For overseas investment businesses established in special economic zones, economic and technological development areas, bonded zones, high-tech industrial development areas, open coastal cities, open coastal regions, and other areas carrying out special preferential policies, the goods they import or export shall be handled according to the related policies the State enforce in these areas in addition to these Procedures.
Article 34. Businesses funded by Taiwan, Hongkong, and Macao compatriots as well as overseas Chinese shall comply with regulations in the light of these Procedures in addition to "Provisions of the State Council for Encouraging Taiwan Compatriots to Make Investment" and "Provisions of the State Council for Encouraging Overseas Chinese and Hongkong and Macao Compatriots to Make Investment."
Article 35. The Customs shall punish violations of these Procedures according to the "PRC Customs Law," "Rules for the Implementation of Punishment Prescribed by the PRC Customs Administrative Law," and other relevant laws and regulations. Violations of criminal law shall be called to criminal account by judicial organs.
Article 36. All other regulations contravening these Procedures shall give way to these Procedures.
Article 37. The Customs has the right to interpret these Procedures.
Article 38. These Procedures shall go into effect on September 1, 1992 |
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