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China Customs Clarifies Import Duty Exemption Rules for Foreign Investment

The General Administration of Customs has issued a clarification with regard to the implementation and interpretation of the Catalogue of Encouraged Industries for Foreign Investment (2019 Edition), as previously jointly promulgated by the National Development and Reform Commission and the Ministry of Commerce.

More specifically, this supplementary circular makes it clear that imported equipment and machinery fallen within projects of the “encouraged industries” are qualified for exemption from customs duty. But import-related VAT is still due on items specified as being exempt from customs duty. In particular, this applies, as of July 31 this year, to all equipment imported for direct self-use and any associated items imported with regard to said equipment within the total investment amount of an foreign-invested project (including capital development projects).

It should be noted that any such exemption specifically does not apply to items listed in the Catalogue of Goods Not Eligible for Tariff Exemption in Foreign Investment Projects or in the Catalogue of Imported Major Technical Equipment and Products Not Eligible for Tariff Exemptions.

Source: General Administration of Customs

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