Processing Zone Export Tax Refund Policy

I. Concept of Export Processing Zones An export processing zone (hereinafter referred to as a "processing zone") refers to a special enclosed area that is approved by the Customs and approved by the State Council. The processing zone must establish a monitoring system that meets the requirements of customs supervision and isolation facilities and an effective monitoring system; Customs shall set up a special regulatory agency in the processing zone and follow the “Interim Measures for the Supervision of Export Processing Zones by the Customs of the People's Republic of China” for import and export processing. The district’s goods and related places in the district are subject to a 24-hour supervision system.

II. The difference between the processing area and the bonded area The taxation policy for imported goods in the processing area is basically based on the existing policies in the bonded area, and there is no new preferential treatment. But there are the following differences:

1. In terms of function, the function of the processing area is single, and it only refers to processing trade where the product is exported. However, a small number of warehousing companies that provide services for the production of processing enterprises and transport companies that have been approved by the customs to specialize in the import and export of goods within the processing area may be established in the area. ;

2. Domestic processing of raw materials and materials into the processing area is regarded as an export. The Customs will go through customs formalities in accordance with the relevant provisions on export goods and issue export tax rebate declaration forms. Out-of-area enterprises shall go through the export tax refund (exemption) formalities with the taxation department with the declaration form (export tax rebate) and related certificates;

3. For the goods shipped from the processing area to the outside of the area, the customs shall go through the customs formalities according to the relevant provisions on imported goods and tax the finished products.

4. The state's export of processed products and taxable services in the region are exempt from VAT and consumption tax.

3. Procedures for Shipment into and Out of Processing Zones For goods shipped outside of the processing zone from the export processing zone, the Customs shall go through the customs formalities in accordance with the relevant provisions on export goods and tax the finished goods; the enterprises outside the export processing zone (hereinafter referred to as “ The goods imported into the export processing zone by an enterprise outside the zone shall be regarded as the same as the export. Customs shall apply for export declaration procedures.

IV. Management Rules for Retirement (Exemption) Taxes in Processing Zones (1) Domestically-manufactured products sold by out-zone enterprises to enterprises in export processing zones (hereinafter referred to as “in-area enterprises”, the same below) and shipped to export processing zones for use by enterprises in the zone Equipment, raw materials, spare parts, components, packaging materials, and basic equipment required for the production of basic equipment, processing enterprises and administrative departments, and office buildings, and export goods declarations issued by enterprises outside the region issued by the customs (export tax rebates) (Via), VAT special invoices (or ordinary invoices), tax (export goods) special payment books, foreign exchange receipts verification forms and other certificates, apply to the tax authorities responsible for their export tax rebate processing (exemption) tax. A reasonable amount of infrastructure materials are required for enterprises in the region to build infrastructure and production and office users in the processing enterprises and administrative departments of the region. The enterprises outside the region and relevant enterprises and administrative departments in the region shall establish special books to prepare tax refund agencies. Review.

(2) Tax refunds (exemptions) shall not be applied to production consumer goods, transportation vehicles, etc. sold by out-of-area enterprises to regional enterprises, administrative departments, and transported to export processing zones for use by them.

(3) Imported machinery, equipment, raw materials, spare parts, components, packaging materials, infrastructure materials, etc. that are sold to enterprises, administrative departments within the zone and transferred to export processing zones for use by the enterprises outside the zone, and will not be returned to them. The value-added tax and consumption tax that have been paid for import.

(4) As described in Article 1 of the above, for domestic-funded enterprises that have the right to operate import and export, and foreign-invested enterprises that implement the “exemption, offset, retreat” or “first retreat” taxation management measures for sales and transportation to export processing zones. The goods shall be subject to withdrawal (exemption) taxes in accordance with the provisions of the existing administrative measures for tax refund (exemption) of exported goods; the goods mentioned in Article (1) above shall be sold to and imported into export processing zones by foreign-invested enterprises that have implemented tax exemption management measures. The tax exemption policy will still be implemented before the end of 2000.

(5) All goods sold outside the district and shipped into the export processing zone shall be issued with export sales invoices, and no special value-added tax invoice or ordinary invoice may be issued.

For goods sold outside the district for sales and transportation into the export processing zone, they are allowed to issue taxation in accordance with the "Notice of the Ministry of Finance and the State Administration of Taxation on the Administration of the Resumption of the Use of Export Value-added Tax Payment Certificates for Export Goods". (Cargo) special payment book.

(6) Production of domestic equipment, raw materials, parts, components, packaging materials, construction infrastructure, processing enterprises, and administrative departments for enterprises outside the region that are sold to enterprises in the region and transferred to export processing zones for use by enterprises in the region, For a reasonable amount of infrastructure materials required for office space, the customs shall issue a declaration form for export goods (special export tax rebate), and list the “export processing area” in the column “Delivery to Export Countries” of the customs declaration form.

For the above-mentioned goods, the customs shall enter and transmit the information of its customs declaration form in accordance with the current relevant regulations, so that the tax refund authority may review the customs electronic information when handling the tax refund.

(7) Value-added tax and consumption tax shall be exempted for goods and taxable services processed and produced in the zone by enterprises in the region.

(8) For the goods entering and leaving the export processing zone and abroad, the customs shall implement the measures for the management of the import and export goods inventory list.

No tax refund will be applied to goods exported by companies in the region to overseas countries.

(9) Enterprises in the area must not entrust outside companies to process products. The enterprises outside the zone shall not be required to apply for refund (exemption) tax on goods supplied by the enterprises within the zone after they are supplied with raw materials and parts processed into finished products, and sold by the outside-area enterprises and imported into the zone.

(10) Those who violate the provisions of these Measures and resort to falsification or fraudulent means to fraudulently withdraw (relieve) taxes shall be punished in accordance with the relevant provisions of the "Law of the People's Republic of China on the Administration of Tax Collection" and the "Customs Law of the People's Republic of China".