Under the value added tax (VAT) pilot programme, international transportation services and the export of research and development services and design services are zero-rated. To clarify the rules for the implementation of this zero-rating, the State Administration of Taxation and the Ministry of Finance have issued administrative measures.
Mainland China and Hong Kong have reached an agreement on the enhancement of economic and trade cooperation and exchanges between the two jurisdictions under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) and signed Supplement 9 to CEPA. Supplement 9 provides for a total of 43 measures for services liberalisation and trade and investment facilitation.
In order to encourage imports and economic and social development, the Ministry of Finance has announced that China will apply lower import provisional taxes on more than 730 kinds of goods, with an average rate of 4.4% - over 50% lower than the most-favoured nation rates.
The General Administration of Customs has issued an announcement which sets out the principles to be applied in classifying imported articles and in determining their dutiable value, indicating the correct approach for articles listed (or not listed) in the relevant classification and dutiable value tables.
The General Administration of Customs has issued a formal announcement of new anti-corruption measures with respect to the giving and receipt of so-called 'red packets' - cash, securities, payment vouchers, commercial pre-paid cards or other instruments. The announcement sets out the obligations and restrictions on customs units and individual officers.
The General Administration of Customs has issued Announcement 63/2011 on the implementation of changes to the China-Singapore Free Trade Agreement Rules of Origin and Customs Procedures arising from the China-Singapore Amendment Protocol. Among other things, it deals with the retrospective issuance of preferential certificates of origin.
In accordance with the Administrative Measures for the Origin of Import and Export Goods under the China-Association of Southeast Asian Nations Free Trade Area, the old format of the certificate of origin was replaced by a new format. A recent announcement clarifies the period for which Customs will accept old certificates.
According to a World Trade Organisation (WTO) expert panel ruling, China's export restrictions on nine raw materials used in the manufacture of high-technology products are inconsistent with its WTO obligations. China must now either appeal the ruling or comply with it. The ruling strengthens EU arguments against China's restrictions on another vital category of exports: rare earths.
The past few months have seen a number of customs-related developments, including the announcement of zero duty treatment for certain additional goods from Hong Kong and Macau under the Closer Economic Partnership Arrangement and the conclusion of a free trade agreement with Costa Rica.
The General Administration of Customs has issued the Announcement on the Smooth Implementation of the Measures for Customs Supervision over Processing Trade Goods. The announcement lists eight circumstances in which enterprises are prohibited from using processing trade goods as collateral, and outlines the application requirements to collateralise processing trade goods.
The General Administration of Customs has recently issued guidance relating to China's trading partners in the Association of Southeast Asian Nations (ASEAN). The announcements concern the use of movement certificates and certificates of origin for the purposes of the ASEAN-China Free Trade Area.
The General Administration of Customs issued a public announcement on its Decision to Revise the PRC Customs Processing Trade Goods Supervision and Administrative Procedures. It alters the original procedures to adapt to changes in the processing trade and to increase standardisation in the processing trade industry.
The Measures for the Administration of Enterprise Classification set out procedures for enterprises to apply for upgrades in their classifications. In light of the benefits associated with better classification, enterprises should follow the new customs regulations, secure the highest possible category and avoid a classification downgrade as a consequence of customs audits and investigations.
The General Administration of Customs has released Additions to the Rules of Origin for Hong Kong Zero-Tariff Goods and Additions to the Rules of Origin for Macau Zero-Tariff Goods, pursuant to the closer economic partnership arrangements with Hong Kong and Macau, respectively. The measures are now in effect.
China and Taiwan have concluded a long-awaited economic cooperation framework agreement. It introduces an 'early harvest' of trade concessions, which will become effective within six months of its entry into force, and is expected to pave the way for a free trade agreement. The optimum allocation of resources on both sides of the Taiwan Strait could prove a key factor in the long-term success of an investment in the Chinese market.
In recent months the General Administration of Customs and other import and export bodies have issued a number of new and revised measures and policies. The issues covered range from environmental requirements for scrap steel imports to the duty-free import of collectibles for charitable purposes, to name only two.
Shanghai's municipal government has announced plans for an enhanced export value added tax (VAT) refund pilot scheme for Chinese exporters, while the State Administration of Taxation has clarified the rules on export VAT refunds. A separate announcement on export licences for ferroalloys demonstrates that the central government wishes to control export volumes of metals and metal alloys.
A member of a smuggling network was caught smuggling mobile phones and devices as part of an illegal enterprise that was worth more than Rmb1.06 billion. The group used long-distance road transportation, speedboats and individual smugglers to smuggle products and components into China, reassembling the parts on arrival for resale within China and thereby evading cross-border duties and taxes.
Changes to the Rules on the Administration of Proceedings for Administrative Penalty Cases provide alternative simplified procedures for levying penalties for certain violations. In certain circumstances Customs can now issue an on-the-spot penalty order against a defendant or its agent, and companies may prefer to settle, rather than commencing formal measures to challenge a penalty order.
China and New Zealand have signed the New Zealand-China Free Trade Agreement, which commits China to eliminating tariffs on 96% of New Zealand exports. However, even though the agreement requires the two countries to eliminate tariffs, quantity-based controls for certain products will remain in respect of the selective enjoyment of the preferential 0% duty rate.