Nationwide rolling out of Consolidated Duty Collection
On 24 July 2015, the General Administration of Customs (“GAC”) released Notice No.33, stating that effective from 27 July 2015, the consolidated duty collection reform would be rolled out nationwide on the basis of prior pilot programs. For qualified import and export enterprise, customs can calculate and collect taxes on a consolidated basis on the import and export goods of a period. An enterprise fulfilling the prescribed criteria can apply to its in-charge customs office and is subject to the credit evaluation. After obtain the qualification of enjoying consolidated duty collection, the enterprise is required to submit a blanket guarantee to its in-charge customs office. Consolidated duty collection mechanism would change the traditional duty collection mode that reviewing taxes payment status on the basis of each shipment of goods and releasing goods only after settlement of import/export taxes. This reform could bring benefit to relevant enterprises by improving customs clearance efficiency and enhancing the utilization efficiency of funds.
The World Customs Organization (“WCO”) published HS Nomenclature 2017 edition
Recently, WCO has published the amendments to the HS Nomenclature that will enter into force in 1 January 2017. As the international HS codes serves as the basis for the import and export classification system used in the PRC, GAC will adjust the HS codes that are currently in use, according to the HS Nomenclature 2017 edition. Such adjustments on the HS codes are estimated to be published by GAC by the end of 2016.
GAC and the National Development and Reform Commission (“NDRC”) issued 58 unit consumption standards for processing trade.
On 21 July 2015, GAC and the NDRC jointly released a notice to issue 58 unit consumption standards for processing trade, which will come into force in 17 September 2015. The 58 items of goods include Platinum jewelry, parquet, beer malt, electrolytic capacitor, and certain apparels, etc.
Pilot program of using electronic Automatic Import License further expanded
On 31 July 2015, GAC, together with the Ministry of Commerce, issued a Notice No.35 in relation to the wider adoption of the electronic Automatic Import License (“AIL”). Starting from 1 August 2015, the pilot program of using electronic AIL would be further expanded from Shanghai Pilot Free Trade Zone to ten regional customs including Tianjin, Shanghai, Nanjing, Ningbo, Fuzhou, Xiamen, Guangzhou, Shenzhen, Gongbei and Huangpu. Qualified enterprises are to be exempted from submitting the AIL in hardcopies. The customs will examine the electronic AIL through online system, and will not endorse permits in hardcopies.
National wide implementation of “Double-random” mechanism
“Double-random” refers to the random selection of targets to be inspected and the random selection of customs’ inspection personnel. Declaration forms with high risks will be automatically selected by computers on the basis of the customs’ risk analysis. Moreover, personnel to carry out the inspection work will also be selected by computers according to factors like the on-job status of personnel, the location of the inspection site, the workload of the personnel, etc.
The “Double-random” mechanism will promote impartiality in law enforcement and reduce manual intervention of inspections. As risks can be automatically identified by computers, cargos with high risks can be focused and strictly supervised while cargos with low risks can be quick released in practice.
New tax refund policy implemented in Beijing and Shanghai since July with the applicable refund rate of 11 percent.
Beijing and Shanghai offer tax refunds on purchases made by foreign visitors starting from 1 July 2015, which indicate the launch of the national tax rebate policy across the country. China formerly started a pilot tax refund program in Hainan Province in 2011. However, the effect of the pilot policy was not satisfactory due to the limited categories of available goods and tourists structure. It is predicted that, the implementation result of such policy in Beijing and Shanghai would be more satisfactory than that in Hainan.
Tianjin Customs released a series of notices to further support the Tianjin Free Trade Zone
Tianjin Customs released a series of notices in July and August to further support the Tianjin Free Trade Zone (“TJFTZ”) and its innovative development. The content of these notices include the bonded exhibition and trade in Beijing-Tianjin-Hebei region, the supervision of financial leased large equipment by customs elsewhere, the expansion of product category as well as the geographical region of the bonded delivery of futures, joint supervision of leased aircrafts, innovative importation model of cross-border e-commerce, simplified registration procedure of domestic material purchases, provision of aircrafts inspection services, independent verification in processing trade and the deepened tax-related guarantee services, etc. These measures are to stimulate the development of TJFTZ.
Shenzhen Customs launched 30 measures to support the development of Qianhai & Shekou Area of the Guangdong Free Trade Zone
Shenzhen Customs is the first to launch the rapid cross-border customs clearance project between Hong Kong and Shenzhen, which to establish a logistic channel connecting mainland China and Hong Kong through Huanggang and Shenzhen Bay port. Enterprises can complete the customs declarations within the Shenzhen Free Trade Zone (“SZFTZ”) Customs. The goods will be automatically inspected and released by the system of the SZFTZ and/or the ports, which will greatly improve the efficiency of customs clearance work. In addition, Shenzhen Customs also would like to support the development of cross-border e-commerce by establishing a platform connecting between the customs’ supervising system and the cross-border e-commerce and enhance the information sharing. Customs clearance hours for cross-border e-commerce enterprises would be extended to 22 p.m. all year round. Customs clearance process would also be completed within 24 hours upon the goods’ arrival to the customs’ supervised premises.
Free Pre-declaration Portal was launched
On 3 August 2015, Nanjing Customs released a notice, announcing that import and export companies that conduct customs clearance work for themselves can now apply for the usage of the E-Port portal (“Portal”) at nil cost. Per this Notice, enterprises can contact China E-port Information Data Center to install the Portal. This policy was also launched in several other cities including Shenzhen and Tianjin, which is expected to be popularized across the country in the future.
Xiamen Customs to explore and establish a classified supervision mechanism to cargos in supervised areas
On 11 August 2015, Xiamen Customs released the Announcement of Exploring and Establishing a Classified Supervision Mechanism to Cargos in Customs Supervised Areas. Per this Announcement, cargos would be divided into three categories, which are port cargos, bonded cargos and non-bonded cargos, and would be supervised separately. Existing customs regulations on the supervision of port cargos and bonded cargos should generally be followed. For non-bonded cargos, it would cover non-bonded storage cargos and non-bonded processing cargos. The Announcement clarified that the entry conditions for enterprises to operate non-bonded goods, as well as the supervision requirement and supervision processes of the non-bonded storage cargos. Supervision regulation on non-bonded processing cargos will be announced separately.