The State Council approved the Customs Tariff Commission,
The Ministry of Finance and State Taxation Administration of The People’s Republic of China on the second step of cleaning up.
Notice on the opinions on the provisions of tariff and import link tax reduction and exemption
Guo Fa 1994 No.64
People’s governments of all provinces, autonomous regions and municipalities directly under the Central Government, ministries and commissions and institutions directly under the State Council:
In order to give full play to the macro-control function of customs duties, import value-added tax and consumption tax (hereinafter referred to as import tax) on the national economy and ensure the revenue of the central government, we must strictly control the reduction or exemption of customs duties and import tax, speed up the clearance of customs duties and import tax reduction and exemption regulations, and strengthen tax collection and management. The State Council agreed to the Opinions of the Customs Tariff Commission, the Ministry of Finance and State Taxation Administration of The People’s Republic of China on the Second Step of Clearing up the Provisions on Tariff and Import Link Tax Reduction and Exemption, which are hereby forwarded to you. Please press this.
No department, locality, unit or individual has the right to reduce or exempt tariffs and import link taxes. The State Council and its competent departments will not accept and approve the requests and reports from various regions and departments for tariff reduction and exemption and import link tax. In principle, financial subsidies at all levels and self-help in production should be adopted to solve the difficulties caused by poor areas and serious natural disasters. After the abolition of the provisions on tariff and import link tax reduction and exemption, the projects that are really difficult and need state support can be solved through financial and other channels at all levels. All regions and departments should proceed from the overall situation of the country, consciously safeguard the seriousness of the tax law, and strictly collect taxes and pay taxes according to regulations.
the State Council
December 29, 1994
(This article has been deleted)
Regarding the second step of clearing tariffs and
Opinions on the provisions of import link tax reduction and exemption
The State Council:
Tariff and import link tax are important means of macro-control of the economy and an important source of central fiscal revenue. At present, the nominal tariff rate in China is higher than the average tax rate in developing countries, but the actual tax rate is very low. The main reason for this situation is that there are too many provisions on tax reduction and exemption, which is not conducive to the integration of China’s economic system with international practices, the establishment of an equal competition mechanism in the socialist market economy, the healthy development of national economic construction, and the effective and reasonable evaluation of various investment projects by the state. Therefore, we must follow the principles of unification, standardization, fairness and openness, and speed up the cleaning up of the provisions on tariff and import link tax reduction and exemption. According to the spirit of the instructions of the Central Committee of the Communist Party of China and the State Council on cleaning up the policy-based tax reduction and exemption provisions, combined with the actual situation of the current national economic development, following the implementation of the first step of cleaning up the policy-based tax reduction and exemption documents approved by the State Council in December 1993, we, together with relevant departments, put forward the opinions on the second step of cleaning up the tariff and import link tax reduction and exemption provisions. The report is as follows:
I. Abolished policy provisions on tax reduction and exemption
(1) Provisions on tax exemption for goods imported with foreign loans.
At present, machinery and equipment, special vehicles and materials needed for project construction imported by foreign loans (including loans from foreign governments and international financial organizations) are exempt from customs duties and value-added tax. There are also provisions on tax reduction and exemption for the use of foreign commercial loans. It is suggested that all these provisions on tax reduction and exemption should be abolished as of January 1, 1995 (including those on the use of foreign exchange loans from China banks).
In order to facilitate a smooth transition, it is suggested to take transitional measures while canceling the above preferential policies, that is, the projects under construction that have signed the order contract before the abolition date and the projects that have not signed the order contract but have signed the loan agreement with foreign countries, and the goods imported before December 31, 1995, are still allowed to be exempted from customs duties and import value-added tax according to the original policy.
(2) Preferential tax provisions on office supplies.
After more than ten years of development, China has been able to produce most office supplies and basically meet domestic needs by introducing technology or cooperative production methods. It is suggested that from January 1, 1995, all office supplies imported by any region, enterprise or unit will be taxed according to regulations, and no tax exemption will be given.
(3) Provisions on duty-free import of special equipment and equipment for radio and television publicity.
At the end of last year, the duty-free regulations on imported foreign propaganda equipment and materials were abolished. It is suggested that the duty-free regulations on special equipment and equipment for radio and television propaganda and parts imported for assembling professional equipment and equipment for radio and television propaganda should be abolished as of January 1, 1995. Three key projects invested by the state, namely, china national radio Business Building, China International Broadcasting Center and Beijing Launch Station of the Ministry of Radio, Film and Television, were imported before December 31, 1995, and the equipment was still implemented according to the original regulations.
(four) Interim Provisions on the use of tax incentives to promote the optimization of technology introduction structure.
In 1991, the "Interim Provisions on Promoting the Optimization of Technology Import Structure by Using Tax Preferences" took the proportion of imported software and hardware as the basis for tax reduction and exemption, which did not conform to international practice and was difficult to operate. It is suggested that this provision be abolished as of January 1, 1995. In the future, if the equipment imported from such projects belongs to technical transformation projects, it can be handled according to the current relevant policies.
(5) Provisions on tax reduction and exemption for video products of TV programs imported by domestic TV stations.
In July, 1991, the Notice on Tax Exemption for TV Program Video Products Imported by Domestic TV Stations stipulated that taxable TV program video products should be granted tax exemption or reduction. In view of the rapid development of the production and production of domestic TV dramas and other TV programs, and the increasing advertising revenue, it is suggested that this tax reduction and exemption regulation be abolished as of January 1, 1995.
II. Adjusted provisions on tax reduction and exemption
(1) Preferential provisions on import tax for border and barter trade.
The current tax reduction and exemption policies for border trade and barter trade will be abolished when they expire on December 31, 1995. In view of the current backlog of plywood, asbestos and combine harvesters in the domestic market, and the difficulties in the operation of domestic production enterprises, it is suggested that the tax reduction and exemption for plywood, asbestos and combine harvesters imported through border trade, barter, donation and economic and technological cooperation projects with neighboring countries should be stopped from January 1, 1995, and the tax should be resumed at the statutory rate.
Cancel the provisions on tax reduction and exemption for the barter trade, general seafood imported by border trade in Yanbian and Ji ‘an, and materials imported by enterprises in special economic zones and the former Soviet Union, Eastern Europe and other countries. Since January 1, 1995, it will be implemented according to the current national unified tax policy for materials imported by border trade and barter trade. The barter imported materials for personal use in special economic zones are included in the management scope of materials for personal use.
(2) Provisions on tax exemption for imported sporting goods.
In the past 10 years, the management system of China’s sports teams and the technical level of domestic production of sporting goods have changed greatly. The relevant provisions in the Notice on the Tax Exemption of Imported Sports Equipment for Professional Teams of the Central and Provincial, Municipal and Autonomous Region Sports Committees formulated in 1983 should be adjusted. Since January 1, 1995, the objects enjoying tax exemption have been limited to the national teams belonging to the State Sports Commission, among which the variety of sportswear is limited to competition-specific clothing. Every year, the State Sports Commission submits an application, and the General Administration of Customs, jointly with relevant departments, examines and approves the total amount of duty-free imports, and taxes will be levied according to regulations if the total amount exceeds. For sports equipment and sportswear sponsored by foreign businessmen, after the General Administration of Customs coordinates the production department with relevant departments, the list of articles that cannot be produced in China will be approved and exempted from tax.
(3) Provisions on duty-free shops.
All kinds of duty-free shops (markets) set up in China at present, except those at exit ports, do not conform to international practice. It is suggested that the duty-free shops at ports of entry and the pilot foreign currency duty-free shops (fields) in the Special Zone should be abolished as of January 1, 1995. For other foreign currency duty-free shops in China, it is planned to make further investigation and study before putting forward suggestions for cleaning up. Prior to this, other domestic foreign currency duty-free shops (fields) should strengthen management and strictly implement relevant regulations.
Three, the abolition of specific and special cases of tax reduction and exemption provisions
(a) for those specific and special tax reduction and exemption provisions for individual projects, enterprises, institutions, products and special funds, as well as the temporary tax reduction and exemption provisions (a total of 44 items) approved by the Central Committee of the Communist Party of China and the State Council before issuing the Opinions on the Current Economic Situation and Strengthening Macro-control (Zhongfa [1993] No.6), the implementation shall be suspended from January 1, 1995. However, if an order contract has been signed according to the original provisions before December 31, 1994 and the procedures for tax reduction and exemption have been completed at the customs before January 31, 1995, it will still be implemented according to the original provisions. The Ministry of Finance may take appropriate care of the imported goods of national key construction projects and the implementation of government agreement trade, if there are difficulties due to the suspension of implementation of documents and regulations.
(II) Provisions on tax exemption of imported materials with foreign exchange of 10 million US dollars retained for tourism in Guilin (Guo Ban Tong [1991] No.25), provisions of the General Administration of Customs on tax reduction of imported raw materials of Wuhan Changfei Optical Fiber and Cable Company by half (No.963 [1992] of the General Administration of Customs), and provisions of the General Administration of Customs on granting tax exemption to materials and spare parts of program-controlled switches used in the import bureau of Tianjin Nikko Electronic Communication Industry Co., Ltd. (No.1555 [1992] of the General Administration of Customs)
Four, stop the provisions of tax reduction and exemption for some commodities.
For goods that have imported technology and produced in large quantities, can meet domestic needs, or the country has invested heavily and needs to properly protect their normal development, and the import tax rate has been basically reasonable, all tax reductions and exemptions will be abolished, and taxes will be resumed at the statutory rate, and the catalogue will be listed and implemented by stages. This time, 20 kinds of commodities are listed first (excluding spare parts and key parts imported by designated enterprises producing such products for production), and it is suggested that tax reduction and exemption should be stopped from January 1, 1995, regardless of any mode of trade, any region, enterprise, unit or individual. However, it is excluded from the international treaties that belong to international organizations (excluding non-governmental organizations) and foreign governments and that China has concluded or acceded to, as well as the agreements signed between our government and other governments that can enjoy tax reduction or exemption. The provisions that all kinds of people going abroad, Taiwan compatriots and overseas Chinese (excluding foreign Chinese) can bring them into China duty-free or buy these items duty-free at home are temporarily retained.
V. Measures for the implementation of the approved quota for imported goods with tax reduction or exemption in specific areas
In order to strengthen the management of imported goods in specific areas, the measures for the management of approved quotas are implemented for goods that can be imported with tax reduction or exemption in specific areas according to regulations, and tax reduction or exemption is granted within the approved quotas (in which specific amounts are listed separately for some key commodities), and goods imported in excess of the quotas are taxed at the statutory tax rate. This method is first tried out in special economic zones. In 1995, the quota of materials imported by special economic zones for their own use was studied and put forward by the State Planning Commission in conjunction with relevant departments and submitted to the State Council for approval.
With the development of the national economy, the supply of market materials in the special zone has been greatly improved, and the total foreign exchange used in 1995 for market materials imported by the special zone at half tax was controlled within 200 million US dollars. Since January 1, 1996, the provisions on semi-tax import of market materials in special economic zones have been abolished.
Since January 1, 1995, if the import value-added tax is reduced or exempted for imported goods according to regulations, it will not be deducted when calculating the domestic value-added tax.
Clearing up the provisions on tariff and import link tax reduction and exemption is an important measure to implement the spirit of the 14th Party Congress, the decisions of the 3rd and 4th Plenary Sessions of the 14th CPC Central Committee and the spirit of the Central Economic Work Conference, and to establish a socialist market economic system. Next year, in accordance with the spirit of the instructions of the CPC Central Committee and the State Council, we will study and put forward suggestions on further cleaning up the provisions on tariff and import link tax reduction and exemption, and submit them to the State Council for approval.
If there is nothing wrong with the above opinions, please forward them to all regions and departments for implementation.
The State Council Customs Tariff Commission
Finance and politics department
State Administration of Taxation
December 16, 1994