ISSUING AUTHORITY:

General Administration of Customs

DATE OF ISSUANCE:

December 21, 2020

EFFECTIVE DATE:

March 1, 2021

On March 1, 2021, the General Administration of Customs (GAC) officially implemented the new Administrative Measures of the Customs of the People's Republic of China on Tax Reduction and Exemption for Imports and Exports (“Order No. 245”) and repealed Order No. 179 on the same issue. Compared with the two amendments of Order No. 179 in 2017 and 2018,  Order No. 245 places greater importance on optimizing the customs procedures for tax reduction and exemptions for imported goods as well as regulating and supervising the use of goods subject to tax reduction and exemption for refinancing business.

The simplification of procedures for tax reduction and exemption is primarily found in the following: first, Order No. 245 implements the measures of examination and confirmation for goods subject to tax reduction and exemption instead of the previous filing and approval procedure; secondly, the Customs Office also improved their efficiency by shortening the duration for examination and confirmation; lastly, follow-up regulation of goods subject to tax reduction and exemption will be incorporated into credit management records.

Order No. 245 also enhances the supervision on the refinance of goods subject to tax reduction and exemption. First of all, the pledge will no longer be allowed to apply to goods subject to tax reduction and exemption, which have not been released from customs supervision. Moreover, Order No. 245 abolishes the three types of guarantee previously set out in Order No. 179, and only emphasizes the requirement of “providing tax guarantee with property and rights recognized by the Customs Office according to the law” for using the goods subject to tax reduction and exemption for mortgage loans. This policy allows the competent Customs authority in charge of approval to have greater discretion, but will lead to greater uncertainty toward the approval of the guarantee as well. In addition, it is clearly stated that the applicant for tax reduction and exemption should fulfill its obligation to report on the use of the goods and the change of its entity within the period of customs supervision, otherwise it may receive administrative penalties.

Reference:

海关总署第245号令（关于公布《中华人民共和国海关进出口货物减免税管理办法》的令）