China customs models for processing trade | KPMG | GLOBAL

China: Customs “work order write-off” model for processing trade

China customs guidance

China’s customs authority issued guidance that departs from traditional customs’ administrative models for write-offs, and provides for a “work order write-off” model for processing trade enterprises.


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The guidance released by the General Administration of Customs is known in English as: the “announcement on developing work order write-off of the processing trade” or Announcement No. 53 [2015] (6 November 2015). 

With a change from the traditional practice of “filed unit consumption write-offs” in customs’ administrative models, the work order write-off model can help eliminate inventory discrepancies of bonded materials and may provide the benefit of improving compliance practices of processing trade enterprises and reducing their implicit compliance cost. The model, however, sets higher requirements for the “enterprise resource planning” (ERP) system—an enterprise’s production procedures and internal control system. Therefore, processing trade enterprises need to consider the details and implications of this model, and stay informed of the implementation of the model in their customs jurisdictions.


Read a November 2015 report prepared by the KPMG member firm in China: Announcement Released by the General Administration of Customs to Develop Work Order Write-Off of the Processing Trade

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