Promulgation Authorities:  General Administration of Customs

Promulgation Date:  2018.05.29

Effective Date:  2018.07.01

Validity Status:  valid

Administrative Measures of the People's Republic of China on Levying of Taxes by the Customs on Imports and Exports (Revised in 2018)

Administrative Measures of the People's Republic of China on Levying of Taxes by the Customs on Imports and Exports (Revised in 2018)

CHAPTER 1 GENERAL PRINCIPLES

Article 1 These Measures are formulated in accordance with the provisions of the Customs Law of the People's Republic of China (hereinafter referred to as the "Customs Law"), the Regulations of the People's Republic of China on Import and Export Duties (hereinafter referred to as the "Duties Regulations") and other relevant laws and administrative regulations for the purposes of ensuring thorough implementation of State taxation policies, strengthening Customs administration of tax collection, ensuring levying of taxes in accordance with the law, and safeguarding tax collection of the State and the legal rights and interest of taxpayers.   

Article 2  Levying of taxes by the Customs shall comply with the principles of "accurate classification, proper valuation, levying in accordance with tax rates, granting reduction and exemption in accordance with the law, implementing refund and collection of underpaid taxes, and turning taxes collected promptly into the treasury".   

Article 3  These Measures shall apply to administration of levying and collection of import and export duties as well as tax on imports collected by the Customs.   Administration of levying and collection of import duties and vessel tonnage tax shall comply with the provisions of relevant laws, administrative regulations and department rules; where there is no relevant provision in the laws, administrative regulations and department rules, these Measures shall apply.

Article 4  The Customs shall bear confidentiality obligation in accordance with the relevant State regulations, and safeguard taxpayer information which involve commercial secrets, and shall not provide such information to external parties, unless otherwise stipulated by the laws and administrative regulations.   Taxpayers may request in writing that the Customs keep their commercial secrets confidential, specifying the contents to be kept confidential, but shall not refuse to provide relevant material to the Customs on the ground of commercial confidentiality.

CHAPTER 2 LEVYING AND COLLECTION OF TAXES ON IMPORTS AND EXPORTS

Section 1 Declaration, Examination and Approval

Article 5  Taxpayers shall complete Customs declaration formalities in accordance with the law for their imports/exports, and submit the relevant documents in accordance with regulations. Where the Customs deems it necessary, the taxpayers shall also provide relevant material on classification of commodities, Customs value, and place of origin etc. Where the material provided is in a foreign language and upon demand by the Customs, the taxpayers shall provide a Chinese translation and be responsible for the contents of the translation.   Where the imports/exports are entitled to tax reduction or exemption, the taxpayers shall also submit the "Certificate of Tax Exemption for Import and Exports" (hereinafter referred to as the "Tax Exemption Certificate", see template in Appendix 1) issued by the Customs in charge; except for goods which are entitled to tax reduction or exemption as listed in Article 70 of these Measures.

Article 6  Taxpayers shall declare truthfully the description, tariff code (commodity code), model and specification, price, insurance and freight fee and other relevant expenses, place of origin, quantities etc of the imports/exports in accordance with the provisions of laws, administrative regulations and Customs rules on classification of commodities, Customs value determined, and rules of origin.   

Article 7  The Customs may request taxpayers to submit supplementary declaration in accordance with relevant regulations for the purpose of examination and determination of classification of commodities, Customs value, and place of origin etc of the imports/exports. Taxpayers may also take initiative to submit supplementary declaration voluntarily where necessary.   

Article 8  The Customs shall, pursuant to the provisions of laws, administrative regulations and Customs rules, examine the description, model number, tariff code, place of origin, price, transaction terms, quantities etc for imports/exports declared by taxpayers.   The Customs may, based on the specific conditions of the port clearance and imports/exports, conduct only the procedural examination of the contents of the declaration during cargo clearance; and conduct substantive check on the authenticity and accuracy of the declared price, classification of commodities, place of origin etc, after the goods are released.

Article 9   The Customs may inspect the imports/exports, conduct laboratory testing and checking, or verify related enterprises, for the purpose of examination and determination of the classification of commodities, Customs value, place of origin etc of the imports/exports.   Upon examination, where the Customs discovers that there is an error in the tariff code of imports/exports declared by the taxpayer, it shall re-determine the tariff code pursuant to the relevant rules and regulations on classification of commodities.

Upon examination, where the Customs discovers that the price declared by the taxpayer for the imports/exports is inconsistent with the transacted price and terms, or it is impossible to determine the transacted price, it shall revalue the price in accordance with the relevant regulations on determination of Customs value for imports/exports.

Upon examination, where the Customs discovers that there is an error in the place of origin of the imports/exports declared by the taxpayer, it shall determine the place of origin, through examination of the certificate of place of origin, physical inspection of the goods, examination of other relevant documents etc, and in accordance with the relevant Customs regulations on place of origin.

Upon examination, where the Customs discovers that the application for tax reduction/exemption submitted or the contents declared by a taxpayer does not comply with the relevant regulations on tax reduction/exemption, it shall levy taxes in accordance with the regulations.

Taxpayers who violate the provisions of Customs regulations and are alleged to have made false declaration or concealed facts in their declarations shall be handed over to and dealt with by the Customs investigation or anti-smuggling department in accordance with the regulations.

Article 10  Taxpayers may, prior to actual importation/exportation, apply to the Customs for pre-classification of commodities, pre-examination of prices, or pre-determination of the place of origin. The Customs shall inform the taxpayers in writing upon examination and determination, and endorse at the time of actual importation/exportation of the goods.   

Section 2 Levying and Collection of Taxes

Article 11  The Customs shall compute and levy taxes on imports/exports based on the tariff code, Customs value, place of origin, applicable tax rates, and foreign exchange rates.   

Article 12  The Customs shall determine the applicable tax rates for imports/exports in accordance with the provisions of the Duties Regulations on applicable most-favoured-nation tax rates, negotiated tax rates, preferential tax rates, normal tax rates, export tax rates, tariff quota tax rates or provisional tax rates, as well as the provisions on applicable tax rates for implementation of anti-dumping measures, anti-subsidy measures, safeguarding measures or levying and collection of retaliatory duties.   

Article 13  Imports/exports shall be subject to the prevailing tax rates on the date when the Customs accepts declaration for such imports/exports.   Advance declarations approved by the Customs prior to arrival of the imports shall be subject to the prevailing tax rates on the date of entry declaration of the vehicle transporting such goods.

Imports in transit shall be subject to the prevailing tax rates on the date when the Customs at the designated place accepts the import declaration; advance declarations approved by the Customs prior to arrival of the goods at the designated place shall be subject to the prevailing tax rates on the date when the vehicle transporting such goods arrives at the designated place.

Exports in transit shall be subject to the prevailing tax rates on the date of the Customs at the place of departure accepts the export declaration.

Upon approval by the Customs, Imports/exports subject to consolidated declaration shall be subject to the prevailing tax rates on the date when the Customs accepts declaration for importation or exportation of each batch of goods.

Imports which are not declared within the stipulated period and thus sold off by the Customs pursuant to the law shall be subject to the prevailing tax rates on the date of entry declaration of the vehicle transporting such goods.

Where imports/exports are subject to supplementary tax levy due to violation of provisions by the taxpayer, the prevailing tax rates on the date of occurrence of such violation shall apply; where it is impossible to determine the date of occurrence, the prevailing tax rates on the date of discovery of such violation by the Customs shall apply.

Article 14  For bonded goods, duty-reduced/exempted goods or leased goods that have been declared for entry and released, or for temporary imports/exports which have been declared for entry/exist and released, under any of the following circumstances where tax payment is required, the prevailing tax rates on the date when the Customs accepts a new Customs declaration form resubmitted by the taxpayer for completion of tax payment and relevant formalities shall apply:   

(1) Upon approval, bonded goods are not re-shipped out of China;

(2) Bonded warehouse goods are transferred for sale in the domestic market;

(3) Duty-reduced/exempted goods are transferred or used for other purposes as approved;

(4) Temporary imports/exports which are exempt temporarily from tax payment are not reshipped out of or into China; or

(5) Leased imports are entitled to tax payment in instalments.

Article 15  For collection of underpaid tax balances or refund of overpaid taxes for imports/exports, the tax rates applicable shall be determined in accordance with the provisions of Article 13 and Article 14 of these Measures.   

Article 16  Where the price and related expenses of imports/exports are in a foreign currency, the Customs shall compute the Customs value in Renminbi, based on the foreign exchange rate applicable on the date when the tax rate for the goods is applied. The Customs value shall be rounded up to the nearest cent.   The monthly foreign exchange rate used by the Customs shall be the benchmark foreign exchange rate against Renminbi on the third Wednesday of the preceding month (where the third Wednesday is a public holiday, the fourth Wednesday shall be adopted) published by the People's Bank of China; where the price of the goods is in a foreign currency other than the benchmark currency, the mean of buying price and selling price published by the People's Bank of China at such time (rounded up to the fourth decimal place in cents) shall be applied. Where there is significant fluctuation in the aforesaid exchange rates, the General Administration of Customs may determine and publish exchange rates separately where it deems necessary.

Article 17  The Customs shall, pursuant to the provisions of the Duties Regulations, levy and collect customs duties for imports/exports on an ad valorem or quantity basis or as per other methods stipulated by the State.   The Customs shall levy and collect tax on imports in accordance with the provisions of the relevant laws and administrative regulations on applicable tax category, tax item, tax rate and formula.

Unless otherwise stipulated, the customs duties and tax on imports collected by the Customs shall be levied in accordance with the following formulae:

The formula for customs duties ad valorem shall be: tax payable = Customs value × tariff rates

The formula for customs duties based on quantity shall be: tax payable = quantity of goods × tariff unit rate

The formula for value-added tax levied at the time of importation shall be: tax payable = (Customs value + actual amount of duty levied + actual amount of consumption tax levied) × value-added tax rate

The formula for consumption tax levied on an ad valorem basis at the time of importation shall be: tax payable = [(Customs value + actual amount of duty levied) ÷ (1－ consumption tax rate)] × consumption tax rate

The formula for consumption tax levied based on the quantity at the time of importation shall be: tax payable = quantity of goods × unit rate of consumption tax

Article 18  Unless otherwise stipulated, the Customs shall issue the tax payment notice promptly after arrival of the goods and acceptance of documents and completion of on-site examination by the Customs. Where the Customs needs to examine the goods so as to determine the classification of commodities, Customs value and place of origin, it shall issue or revise the tax payment notice upon examination and verification.   Taxpayers shall complete acknowledgement formalities upon receipt of the tax payment notice.

Article 19  The tax payment notice issued by the Customs is in sextuplicate, the first copy (receipt) to be retained by the payor or the taxpayer upon collection of payment and affixation of seal by the bank; the second copy (proof of payment) to be retained by the opening bank of the payor as proof of payment; the third copy (proof of collection) to be retained by the State treasury as proof of receipt; the fourth copy (return slip) to be returned to the finance department of the Customs upon affixation of the treasury seal; the fifth copy (examination copy) of Customs duty payment notice to be returned to the Customs after the Treasury receives the duty, or the fifth copy of Customs payment notice for tax on imports to be retained by local tax authorities after the Treasury receives the tax; the sixth copy (file slip) to be retained by the issuing authorities.   

Article 20  Taxpayers shall pay tax to the designated bank within 15 days from the day of issuance of the tax payment notice by the Customs. In case of late payment, the Customs shall impose a late payment fine based on 0.05% per day of the tax in arrears, computed from the due date of tax payment to the date of full payment. The taxpayer shall pay the late payment fine to the designated bank within 15 days from the day of issuance of the notice of late payment fine by the Customs. The notice of late payment fine uses the same template as the tax payment notice.   Where the payment deadline falls on a rest day such as Saturday, Sunday or public holiday, it shall be postponed to the next working day after the rest day or public holiday. In the event of impromptu revision of rest days and working days by the State Council, the Customs shall compute payment period based on the revision.

Article 21  Duties, tax on imports collected by the Customs, late payment fines etc shall be calculated and levied in Renminbi and rounded up to the nearest cent.   The minimum threshold for late payment fines shall be RMB50.

Article 22  The date of receipt of payment by the bank shall be the date of full payment of tax by a taxpayer. The taxpayer shall, upon payment to the bank, submit the tax payment notice stamped by the bank containing business seal, to the issuing Customs for verification, and the Customs shall complete verification formalities based on the tax payment notice.   The Customs shall inform the State treasury accordingly if the Customs discovers that the bank has not turned in the tax collected promptly in accordance with regulations.

Article 23  Taxpayers who lost their tax payment notice before making tax payment may apply to the issuing Customs for issue of a replacement tax payment notice. The Customs shall complete examination and issue a replacement within two working days from receipt of the taxpayer's application. The replacement tax payment notice issued by the Customs shall carry exactly the same content as the original tax payment notice.   Taxpayers who lost their tax payment notice after tax payment is made may, within one year from making tax payment, apply to the Customs in writing for confirmation of tax payment; The Customs shall issue a confirmation upon verification, but shall not issue a replacement tax payment notice.

Article 24  Taxpayers who are unable to pay tax promptly due to force majeure event or revision of State tax policy may, upon provision of tax guarantee pursuant to the law, complete the formalities for deferred tax payment.   

Article 25  In the case of overload or shortfall in bulk imports/exports, the following provisions shall apply:   

(1) Where the overload is within 3% of the quantity stated in the contract or invoice, or in the case of shortfall, the Customs shall levy tax based on the determined unit price and the quantity stated in the contract or invoice.

(2) Where the overload exceeds 3% of the quantity stated in the contract or invoice, the Customs shall levy tax based on the determined unit price and the actual quantity of the imports/exports.

Article 26    Where a taxpayer or guarantor fails to pay tax or late payment fine after three months from the payment deadline, the Customs may take compulsory enforcement measures in accordance with the provisions of Article 60 of the Customs Law.

Where it is evident that the taxpayer has transferred or concealed taxable goods or other assets during the stipulated tax payment period, the Customs may order that the taxpayer to provide tax guarantee to the Customs. Where the taxpayer is unable to provide tax guarantee, the Customs may adopt preservation measures in accordance with the provisions of Article 61 of the Customs Law.

Specific measures on adoption of enforcement measures and preservation measures shall be formulated separately.

CHAPTER 3 LEVYING AND COLLECTION OF TAX ON SPECIAL IMPORTS AND EXPORTS

Section 1 Goods Compensated at no Cost

Article 27    Importation of goods compensated at no cost shall not be subject to import duties and tax on imports collected by the Customs; exportation of goods compensated at no cost shall not be subject to export duties.

Goods compensated at no cost referred to in the preceding paragraph shall refer to goods compensated or replaced by the shipper, carrier or insurance company free of charge after imports/exports is released by the Customs, for reasons of damage, shortage, inferior quality or non-compliance with specifications; such goods shall be the same as the original goods or comply with the provisions of the contract.

Article 28  The taxpayer shall complete import/export declaration for goods compensated at no cost within the claim period stipulated in the original import/export contract and with three years from the date of original importation/exportation.   

Article 29    In declaring the import of goods compensated at no cost, the taxpayer shall submit the claim agreement signed by the buyer and the seller.

Where the Customs deems it necessary, the taxpayer shall also submit an inspection certificate or other proof documents in respect of the damage, shortage, inferior quality or specifications non-compliance of the original imports issued by a qualified commodity inspection agency.

Article 30    In declaring the export of goods compensated at no cost, the taxpayer shall submit the claim agreement signed by the buyer and the seller.

Where the Customs deems it necessary, the taxpayer shall also submit an inspection certificate or other proof documents in respect of the damage, shortage, inferior quality or specifications non-compliance of the original exports issued by a qualified commodity inspection agency.

Article 31  Where the free replacement imports/exports declared by a taxpayer are not exactly the same as the original goods or do not comply with the provisions of the contract completely, the taxpayer shall provide an explanation to the Customs.   Where the Customs is satisfied that the reason is valid and there is no change in the tariff code, it should determine the Customs value and tax payable for the goods in accordance with the relevant provisions on Customs value of imports/exports as well as the applicable exchange rates and tax rates for the original imports/exports. Where the tax payable is higher than the tax levied on the original imports/exports, the differential amount shall be supplemented. Where the tax payable is less than the tax levied on the original imports/ exports, and if the consignor or carrier of the original imports/ exports or the insurance company makes compensation simultaneously, the Customs shall refund the tax amount corresponding to the compensation; if there is no compensation, the differential tax amount shall not be refunded.

Where a taxpayer declares imports/exports which are for free replacement or exchange purposes, if a different tariff code is used for the original goods, the relevant provisions on goods compensated at no cost  shall not apply, and the Customs shall levy and collect tax in accordance with the relevant provisions on general imports/exports.

Article 32  Where the taxpayer declares free replacement imports/exports and the original imports being replaced are not re-shipped out of China and not handed over to the Customs for disposal, or the original exports being replaced are not re-shipped into China, the Customs shall revaluate and levy tax on the original imports/exports based on the applicable tax rate and exchange rate on the date of acceptance of the import/export declaration for the goods compensated at no cost  and pursuant to relevant provisions.   

Article 33    Original imports that have been replaced are not subject to export duties when they are re-shipped out of China.

Original exports that have been replaced are not subject to import duties and tax on imports collected by the Customs, when they are re-shipped into China.

Section 2 Imports under Lease

Article 34  Unless otherwise stipulated, taxpayers importing leased assets shall complete import declaration and tax payment formalities with the Customs at the locality.   Taxpayers making import declaration for leased goods shall submit the lease contract and other relevant documents to the Customs. Where the Customs deems it necessary, the taxpayer shall provide tax guarantee.

Article 35  Imports under lease shall be subject to Customs supervision, from the date of entry to the date of completion of Customs formality upon expiry of the lease.   In the case of one-off lease payments, the taxpayer shall, at the time of declaring imports under lease, complete tax payment formalities and pay tax.

In the case of rental instalments, the taxpayer shall, at the time of declaring imports under lease, complete tax payment formalities based on the first rental instalment, and pay the corresponding tax; at the time of subsequent rental instalments, the taxpayer shall complete tax payment formalities not later than the 15th day after each payment of rental instalment. Where the taxpayer fails to complete tax declaration formalities within the stipulated period, the Customs shall levy and collect the corresponding tax based on the applicable tax rate and exchange rate on the 15th day after the payment of each rental instalment, and impose a late payment fine of 0.05% per day of the tax payable from the deadline for completion of tax declaration formalities stipulated in this article to the date of tax payment.

Article 36    The Customs shall conduct tracking administration on imports under lease, and urge taxpayers to complete tax declaration formalities with the Customs on schedule, to ensure that the tax collected are handed over to the treasury promptly and in full.

Article 37  Taxpayers shall, within 30 days from expiry of the lease period of imports under lease, complete supervision formalities and re-ship the leased imports out of China. Taxpayers who intend to purchase the imports or renew the lease shall complete the relevant formalities with the Customs declaration not later than the 30th day after expiry of the lease period.   The Customs shall determine the Customs value and tax payable for purchase of the leased imports, in accordance with the relevant provisions on determination of Customs value of imports and based on the applicable exchange rate and tax rate on the date when the Customs accepts the relevant formalities for purchase of such goods.

Taxpayers who renew the lease of imports under lease shall submit the lease renewal contract, and complete tax declaration and payment formalities in accordance with the provisions of Article 34 and Article 35 of these Measures.

Article 38    Where the taxpayer fails to complete the relevant formalities for purchase of leased imports with the Customs within the period stipulated in the first paragraph of Article 37 of these Measures, the Customs shall, in addition to determination of the Customs value and tax payable of such goods in accordance with the provisions on determination of Customs value of imports and based on the applicable exchange rate and tax rate on the 30th day after expiry of the lease period, impose a late payment fine of 0.05% per day of the tax payable for the period from the 30th day after expiry of the lease period to the date of completion of tax declaration formalities.

Where the taxpayer fails to complete the relevant formalities to lease renewal with the Customs within the period stipulated in the first paragraph of Article 37 of these Measures, the Customs shall, in addition to collection of tax payable for lease renewal in accordance with the provisions of Article 35 of these Measures, impose a late payment fine of 0.05% per day of the tax payable for the period from the 30th day after expiry of the lease period to the date of completion of tax declaration formalities.

Article 39    Where the lease of imports under lease is terminated before expiry of the lease period, the date of expiry of lease shall be the date of termination of lease.

Section 3 Temporary Imports and Exports

Article 40    Temporary imports/exports shall be subject to Customs administration in accordance with relevant regulations.

Article 41    Temporary imports/exports stipulated in the first paragraph of Article 42 of the Duties Regulations may be exempt from tax payment temporarily within the period stipulated by the Customs.

In the event that the temporary imports/exports stipulated in the preceding paragraph will not be re-shipped out of or into China after expiry of the stipulated period, the taxpayer shall complete import/export declaration and tax payment formalities with the Customs before expiry of the stipulated period. The Customs shall levy and collect tax in accordance with relevant regulations.

Article 42  In the case of other temporary imports/exports outside the scope stipulated in the first paragraph of Article 42 of the Duties Regulations, the Customs shall examine and determine the Customs value of such imports/exports and levy and collect tax on a monthly basis, in accordance with relevant regulations on examination and determination of Customs value of imports/exports and based on the applicable exchange rate and tax rate on the date of acceptance of the import/export declaration by the Customs, or shall levy and collect tax when the goods are re-shipped out of or into China.   The period for computation and levying of tax shall be 60 months. Where the period is less than 1 month but more than 15 days, the period shall be deemed as 1 month for the purpose of levying and collection of tax; where the period is less than 15 days, tax shall not be levied. The period for computation and levying of tax shall commence from the date of release of goods.

The formula for levying and collection of tax on a monthly basis shall be:

Custom duties per month = Total amount of custom duties × (1/60)

Tax on imports per month = Total amount of tax on imports × (1/60)

In the event that the temporary imports/exports stipulated in the first paragraph of this Article are not re-shipped out of China or into China, the taxpayer shall complete import/export declaration and tax payment formalities with the Customs before expiry of the stipulated period, and pay the balance tax amount.

Article 43    In the event that the temporary imports/exports are not re-shipped out of or into China within the stipulated period and the taxpayer fails to complete import/export declaration and tax payment formalities before expiry of the stipulated period, the Customs shall, in addition to levying and collection of tax in accordance with the provisions, impose a later payment fine of 0.05% per day of the tax payable for the period from the date of expiry of the stipulated period to the date of declaration and tax payment.

Article 44    The "stipulated period" referred to in Article 41 to Article 43 of these Measures shall include the period for reshipment of imports/exports out of or into China.

Section 4 Goods Imported or Exported for Repair and Goods Exported for Processing

Article 45    At the time of completion of import declaration for goods imported for repair, taxpayers shall submit the maintenance and repair contract (or original export contract which contains a maintenance and repair clause) for the goods to the Customs, and provide tax guarantee for the import duty and tax to the Customs, or accept Customs administration as per bonded goods. Goods imported for repair shall be reshipped out of China within the period stipulated by the Customs.

Where the import of raw materials or parts is required for goods imported for repair, the taxpayer shall, at the time of completing import declaration formalities for the raw materials and parts, provide guarantee for the import duty to the Customs, or have such goods administered by the Customs as per bonded goods. The raw materials or parts imported shall be used only for repair of the goods imported for repair. The remaining raw materials and parts shall be reshipped out of China together with the goods imported for repair.

Article 46    For reshipping of the goods imported for repair and the remaining imported raw materials and parts out of China, the Customs shall complete formalities to refund the tax guarantee provided by the taxpayer at the time of importation of the goods for repair and the raw materials and parts. Where the goods are administered by the Customs as per bonded goods, the provisions of administrative regulations on bonded goods shall apply.

Where the goods imported for repair cannot be reshipped out of China within the period stipulated by the Customs for a valid reason, the taxpayer shall explain the situation to the Customs before expiry of the stipulated period and apply for an extension of time for reshipment.

Article 47    Where the goods imported for repair are not reshipped out of China within the period permitted by the Customs (including extended period, same hereinafter), the Customs shall implement administration on the goods in accordance with the provisions on levying of tax for general imports/exports, and convert the tax guarantee provided by the taxpayer at the time of importation of such goods, into tax.

Article 48    When completing export declaration formalities for goods imported for repair, the taxpayer shall submit the maintenance and repair contract for the goods (or the original import contract which contains a maintenance and repair clause) to the Customs. Goods exported for repair shall be reshipped into China within the period stipulated by the Customs.

Article 49    When completing import declaration formalities for reshipping into China the goods exported for repair, the taxpayer shall submit the maintenance invoice and other relevant documents for such goods to the Customs.

The Customs shall examine and determine the Customs value of the imports and levy import duty and tax, in accordance with relevant regulations on examination and determination of Customs value of imports, as well as the applicable exchange rate and tax rate on the date when the Customs accepts the declaration for reshipping the exported goods into China.

Where the goods exported for repair cannot be reshipped into China within the period stipulated by the Customs due to a valid reason, the taxpayer shall explain the situation to the Customs before expiry of the stipulated period, and apply for an extension of time for reshipment.

Article 50    Where the goods exported for repair are reshipped into China after the period permitted by the Customs, the Customs shall levy and collect import duty and tax in accordance with the provisions on levying and collection of tax on general imports.

Article 51    When completing export declaration formalities for goods exported for processing, the taxpayer shall submit to the Customs the processing contract of the goods; if the goods are subject to export duties, the taxpayer shall provide export guarantee to the Customs. Goods exported for processing shall be reshipped into China within the period stipulated by the Customs.

Article 52    When completing import declaration formalities for reshipping into China of goods exported for processing, the taxpayer shall submit the processing invoice and other relevant documents for such goods to the Customs.

The Customs shall determine the Customs value of the goods in accordance with the provisions on examination and determination of the Customs value of imports as well as the applicable exchange rate and tax rate on the date when the Customs accepts the declaration for shipping the goods into China, impose import duty and tax, and simultaneously complete the relevant formalities for discharge of tax guarantee provided by the taxpayer for export of such goods.

When the goods exported for processing cannot be reshipped into China within the period stipulated by the Customs due to a valid reason, the taxpayer shall explain the situation to the Customs before the expiry of the stipulated period and apply for an extension of time for the reshipment.

Article 53    Where the goods exported for processing are not reshipped into China within the period approved by the Customs, the Customs shall implement administration in accordance with the provisions on levying of tax on general imports/exports and convert the tax guarantee provided by the taxpayer into tax; when goods exported for processing are reshipped into China, the Customs shall levy and collect import duty and tax in accordance with the provisions on levying of tax on general imports.

Article 54  The "period stipulated by the Customs" and the "period approved by the Customs" mentioned in Article 45 to Article 53 of these Measures respectively shall be determined by the Customs in accordance with the relevant contractual provisions and the actual circumstances of goods exported/imported for repair and goods exported for processing.   

Section 5 Returned Goods

Article 55  Where exports are reshipped into China in original conditions within one year from the date of release for export due to quality or specifications reason, the taxpayer shall submit the relevant documents and certificates in accordance with the provisions when completing import declaration formalities. Upon confirmation, the Customs shall not levy and collect import duties or tax on imports, on original exports that are to be reshipped into China.   

Article 56  Where imports are reshipped out of China in original conditions within one year from the date of release for import due to quality or specifications reason, the taxpayer shall submit the relevant documents and certificates in accordance with provisions when completing export declaration formalities. Upon confirmation, the Customs shall not levy and collect export duties on imports which are reshipped out of China.   

CHAPTER 4 REFUND AND ADDITIONAL ASSESSMENT OF IMPORT AND EXPORT TAX

Article 57  Upon discovery of an over-collection, the Customs shall notify the taxpayer immediately for completion of tax refund formalities. The taxpayer shall complete the relevant tax refund formalities within three months from receipt of Customs notification.   

Article 58    Upon discovery of an over-collection, the taxpayer may apply to the Customs within one year from the date of tax payment for refund of overpaid tax and interest based on bank current deposit for the same period.

Taxpayers applying to the Customs for tax and interest refund shall submit the following materials:

(1) Application form for tax refund; and

(2) The documents to prove that tax refund should be granted.

Article 59  For imports reshipped out of China in original conditions due to quality or specifications reason, taxpayers may apply to the Customs for tax refund within one year from the date of tax payment for imports.   Taxpayers applying to the Customs for tax refund shall submit the following materials:

(1) Application form for tax refund; and

(2) Agreement between the consignor and consignee of the goods for return of goods.

Article 60    For exports reshipped into China in original conditions due to quality or specifications reason, if the taxpayers have made another payment of domestic tax that was refunded due to export, taxpayers may apply to the Customs for tax refund within one year from the date of tax payment.

Taxpayers applying to the Customs for tax refund shall submit the following materials:

(1) Application form for tax refund; and

(2) Agreement between the consignor and consignee of the goods for return of goods and certificate issued by tax authorities for re-levying of import-linked tax.

Article 61    Where the goods for which export duty has been paid are not loaded for export due to certain reason and the shutout of such goods has been declared, the taxpayer may, within one year from the date of tax payment, apply to the Customs for tax refund, with an Application for Tax Refund submitted.

Taxpayers applying to the Customs for tax refund shall submit the following materials:

(1) Application form for tax refund; and

(2) The original export declaration form and tax payment notice.

Article 62    In the event of short shipment of bulk imports/exports released upon tax payment, if the consignor, carrier or insurance company has partially refunded or compensated for the short shipment, the taxpayer may apply to the Customs, within one year from the date of tax payment, for refund of tax paid for the short shipment of the bulk imports/exports.

Taxpayers applying to the Customs for tax refund shall submit the following materials:

(1) Application form for tax refund;

(2) Relevant inspection certificate issued by a qualified commodities inspection organisation; and

(3) Document proof for refund or compensation.

Article 63  In the event that the consignor, carrier or insurance company has made a compensation due to damage, inferior quality or non-compliance with specifications of the imports/exports or in the event of short shipment which does not fall under the provision of Article 62 of these Measures, the taxpayer may apply to the Customs, within one year from the date of tax payment, for refund of tax paid corresponding to the compensation.   Taxpayers applying to the Customs for tax refund shall submit the following materials:

(1) Application Form for Tax Refund; and

(2) Document proof of compensation obtained.

Article 64    The Customs shall examine and verify tax refund applications by taxpayers upon receipt. Where the application documents submitted by a taxpayer are complete and comply with the stipulated format, the Customs shall accept the application, and the date of receipt of the application documents shall be the date of acceptance of the application by the Customs; where the application documents submitted by a taxpayer are incomplete or do not comply with the stipulated format, the Customs shall notify the taxpayer one-off, within five working days from receipt of the application documents, of all contents required to be supplemented, and the date of receipt of complete supplementary application documents shall be the date of acceptance of the application by the Customs.

Where a taxpayer applies for tax refund in accordance with the provisions of Article 59, Article 60 or Article 64 of these Measures, the Customs may, based on its discretion, require taxpayers to submit an inspection certificate issued by a qualified commodities inspection organisation in respect of the inferior quality, non-compliance with specifications or damage of the imports or exports, or other relevant document proof.

The Customs shall, within 30 days from the date of acceptance of an application for tax refund, complete investigation and inform the taxpayer whether the application is approved or rejected. The taxpayer shall complete the relevant tax refund formalities within three months from the date of receipt of Customs notification on grant of tax refund.

Article 65    The Customs shall issue a Refund Notice at the time of completion of tax refund formalities, and process in accordance with the following provisions:

(1) Where interest accrued on a supplementary collection should be refunded in accordance with the provisions of Article 58 of these Measures, the refundable interest shall be computed based on the current savings account interest rate stipulated by the People's Bank of China on the date of the issue of the Refund Notice. Interest refundable shall be computed for the period from the date of tax payment to the date of the issue of Refund Notice.

(2) Where the value-added tax on imports has been claimed for rebate, no refund shall be made for such value-added tax, unless otherwise stipulated by State regulations.

(3) Late payment fine shall not be refunded.

Refund of tax and interest which involves refund from the State treasury shall comply with the provisions of the laws and regulations on Treasury administration and the related implementation regulations.

Article 66    Where the Customs discovers under-collection of duty or tax after release of imports/exports, it shall make supplementary collection within one year from the date of tax payment; upon discovery of any omitted collection, the Customs shall levy and collect tax from the taxpayer within one year from the date of release of the goods.

Article 67    Where an under-collection is due to a breach of provisions by the taxpayer, the Customs shall make supplementary collection within three years from the date of tax payment; where an omitted collection is due to a breach of provisions by the taxpayer, the Customs shall make supplementary collection within three years from the date of release of the goods. In addition to supplementary collection by the Customs in accordance with the law, a late payment fine of 0.05% per day of the under-collection or omitted collection shall be payable for the period from the date of tax payment or release of the goods, to the date of discovery of the violation.

Where an under-assessment or omitted assessment on goods subject to Customs supervision is due to a breach of provisions by the taxpayer, the Customs shall make supplementary assessment within three years from the date of tax payment, and impose a late payment fine of 0.05% per day of the under-assessment or omitted assessment for the period from the date on which tax is payable to the date of discovery by the Customs of the breach.

The "date on which tax is payable" referred to in the preceding paragraph shall mean the date on which the breach is committed by the taxpayer; where it is impossible to ascertain the date on which the breach is committed, the date of discovery by the Customs of the breach shall be the date on which tax is payable.

Article 68  When making supplementary collection or pursuing tax payment, the Customs shall issue a Notice of the Customs on Supplementary Collection. Taxpayers shall make remedial tax payment within 15 days from receipt of the Notice of the Customs on Supplementary Collection.   The Customs shall issue a tax payment notice on the stipulated deadline to taxpayers who fail to make or supplement tax payment within the period stipulated in the preceding paragraph.

Article 69    Pursuant to the provisions of Article 35, Article 38, Article 43 or Article 67 of these Measures, where a late payment fine is imposed in addition to tax payment in the event of a breach of provisions and where the taxpayer fails to make tax payment within the stipulated 15-day period, the Customs shall impose a late payment fine separately in accordance with the provisions of Article 20 of these Measures for the period from the deadline to the date of full payment of tax in arrears.

CHAPTER 5 TAX REDUCTION AND EXEMPTION ON IMPORTS AND EXPORTS

Article 70    In the event of imports/exports subject to tax reduction or exemption, taxpayers shall, prior to import/export of goods, present the relevant documents in accordance with the provisions to the Customs to complete approval and confirmation for tax reduction and exemption. The following imports/exports which are entitled to tax reduction or exemption are not required to complete examination and approval formalities for tax reduction or exemption:

(1) A parcel which is subject to Customs duties, import-linked value-added tax or consumption tax of less than RMB50;

(2) Advertising materials and samples which are of no commercial value;

(3) Goods which are damaged or lost before Customs release;

(4) Fuel, materials and food and beverages necessitated for the inbound and outbound transportation; and

(5) Other goods which are not required to complete examination and approval formalities for tax reduction or exemption.

Article 71    For goods listed in item (3) of Article 70 of these Measures, taxpayers shall, at the time of declaration or within 15 days from the date of release of the goods by the Customs, explain the situation to the Customs in writing, and provide the relevant proof documents. The Customs may, based on its discretion, require the taxpayer to provide an inspection certificate in respect of the extent of damage issued by a qualified commodities inspection organisation. The Customs shall grant tax reduction or exemption in accordance with the extent of actual damage.

Article 72  Unless otherwise stipulated, taxpayers shall complete examination and approval formalities for tax reduction or exemption with the Customs in charge. The Customs shall conduct examination and verification in accordance with the relevant provisions, and issue a Certificate of Tax Reduction or Exemption.   

Article 73    Imports from specific areas, by specific enterprises or for specific purposes which are entitled to specific tax reduction or exemption shall be subject to Customs supervision.

The term of Customs supervision for imports which are entitled to specific tax reduction or exemption shall be as follows:

(1) Vessels and airplanes: eight years;

(2) Motor vehicles: six years; and

(3) Other goods: three years.

The term of Customs supervision shall commence on the date of release of goods for import.

Article 74    During the term of Customs supervision for imports subject to specific tax reduction or exemption, the taxpayer shall report to the Customs in charge, once a year from the date of release of goods, on the status of such imports; except for items approved by the Customs for transfer to another taxpayer which is entitled to the same tax incentives, the taxpayer shall not transfer or dispose the goods before supplementing tax payment and completing formalities for removal of Customs supervision.

Customs supervision shall cease automatically upon expiry of the term of Customs supervision for imports which are entitled to specific tax reduction or exemption. Taxpayers may, within one year from the expiry of the term of Customs supervision, present the relevant documents to the Customs to apply for a certificate of removal of Customs supervision. The Customs shall, within 20 days from receipt of an application, conduct examination and investigation and issue a certificate of removal of Customs supervision.

CHAPTER 6 TAX GUARANTEE FOR IMPORTS AND EXPORTS

Article 75    Under any of the following circumstances, taxpayers applying to the Customs for advance release of goods shall provide adequate tax guarantee in accordance with the preliminary tax payable amount determined by the Customs:

(1) Where the Customs has yet to determine main assessment factors such as the commodity category, Customs value and place of origin;

(2) Where the approval and confirmation formalities for tax reduction and exemption are ongoing;

(3) Where the taxpayer is currently completing deferred tax payment formalities with the Customs;

(4) Provisional imports or exports;

(5) Goods imported for repair or goods exported for processing, except for those administered as bonded goods;

(6) At the time of declaring import/export by the taxpayer for goods compensated at no cost , where the original imports which are damaged, of inferior quality or do not comply with specifications are not reshipped out of China or yet to be handed over to the Customs for disposal, or where the original exports are not reshipped back to China; or

(7) Other circumstances where tax guarantee is required to be provided in accordance with relevant regulations.

Article 76    Unless otherwise stipulated, the term of tax guarantee shall generally not exceed six months; the term may be extended under special circumstances where an extension of time is needed, approval by the Customs in charge shall be obtained.

Tax guarantee shall be in the form of security deposit, or a letter of guarantee issued by a bank or other financial institution, unless otherwise stipulated.

A letter of guarantee issued by a bank or other financial institution shall be in the form of joint and several liability. Where a guarantee period is stipulated in the letter of guarantee, such guarantee period shall not be shorter than the term of guarantee approved by the Customs.

Article 77    Where the taxpayer performs tax payment obligation during the term of guarantee approved by the Customs, the Customs shall complete the relevant formalities for cancellation of tax guarantee within five working days from the date of performance of tax payment obligation.

Where the taxpayer fails to perform tax payment obligation during the term of guarantee approved by the Customs, the Customs shall complete the relevant formalities for conversion of security deposit into tax payment within five working days from the expiry of the guarantee period; where the guarantee is in the form of a letter of guarantee issued by a bank or other financial institution, the Customs shall request the guarantor to perform the corresponding tax payment obligation within six months from the expiry of the guarantee period or within the guarantee period stipulated in the letter of guarantee.

CHAPTER 7 SUPPLEMENTARY PROVISIONS

Article 78    Taxpayers and guarantors disputing over the method of determination of taxpayer, Customs value, commodity category, place of origin, applicable tax rate or exchange rate, tax reduction or exemption, supplementary collection, tax refund, imposition of late payment fines by the Customs, determination of computation and levy method, and determination of place of tax payment shall pay tax in accordance with the relevant administrative decision of the Customs, and may apply to the Customs of the next higher level in accordance with the provisions of the Administrative Review Law of the People's Republic of China and the Measures of the Customs of the People's Republic of China on Implementation of the Administrative Review Law. Taxpayers or guarantors who disagree with the review decision may file a lawsuit with a People's Court.

Article 79  Violation of the provisions of these Measures which constitutes violation of Customs regulations or smuggling shall be punished in accordance with the provisions of the Customs Law, the Regulations of the People's Republic of China on Implementation of Administrative Penalties and other relevant laws and administrative regulations. Where the case constitutes a criminal offence, criminal liability shall be pursued in accordance with the law.   

Article 80    Administration of tax collection on bonded goods and goods entering/existing bonded zones, export processing zones, bonded warehouses and similar bonded supervised premises shall comply with the provisions of these Measures. Where these Measures do not provide, the provisions of relevant laws and administrative regulations and Customs rules shall apply.

Article 81    Administrative measures on declaration and tax payment via electronic data exchange method shall be formulated separately.

Article 82    The documents stipulated in these Measures shall be separately formulated and promulgated by the General Administration of Customs.

Article 83    The General Administration of Customs shall be responsible for the interpretation of these Measures.

Article 84  These Measures shall be effective from 1 March 2005. The Administrative Measures on Levying of Customs Duties promulgated by the General Administration of Customs on 30 September 1986 shall be repealed simultaneously.