Circular on the "Zero-tariff" Policy for Vehicles and Yachts in the Hainan Free Trade Port

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Circular on the "Zero-tariff" Policy for Vehicles and Yachts in the Hainan Free Trade Port Cai Guan Shui [2020] No. 54
Circular on the Zero tariff Policy for Vehicles and Yachts in the Hainan Free Trade Port.png
The Department of Finance of Hainan Province, the Haikou Customs District, and the Hainan Provincial Tax Service of State Taxation Administration,

To implement the General Plan for the Construction of Hainan Free Trade Port, upon approval by the State Council, the "zero-tariff" policy for vehicles and yachts of Hainan Free Trade Port is hereby notified as follows:

I. Before the independent customs operations throughout Hainan Island, ships, aircraft, vehicles, and yachts used for commercial purposes imported by enterprises engaged in transport and tourism and registered in Hainan Free Trade Port as independent legal entities (aviation enterprises shall take Hainan Free Trade Port as the main operating base) will be exempt from import tariffs, import value-added tax, and consumption tax.

The list of enterprises eligible for the policy is finalized and adjusted by the competent departments of transport, culture and tourism, market regulation, and maritime affairs of Hainan Province as well as the CCAC Central and Southern Regional Administration in concert with the Department of Finance of Hainan Province, the Haikou Customs District, and the Hainan Provincial Tax Service of State Taxation Administration with reference to the entries of transport and tourism related industries in the Catalogue of Encouraged Industries in Hainan Free Trade Port.

II. The "zero-tariff" positive list management system will apply to vehicles and yachts, which are listed in the appendix. The list is subject to adjustments by the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration in concert with relevant departments based on Hainan's actual needs and regulatory conditions.

III. "Zero-tariff" vehicles and yachts shall be only for self-service use by enterprises eligible for the policy in Hainan Free Trade Port and subject to customs supervision. Where any transfer is necessary due to bankruptcy or other reasons, consent is required to be obtained from the customs with relevant formalities handled prior to such transfer. In particular, where vehicles and yachts are transferred to entities not eligible for the policy, relevant import-related tax payment shall be made up as required. The transfer of any "zero-tariff" vehicles or yachts shall be subject to domestic value-added tax and consumption tax in accordance with relevant regulations.

IV. Enterprises that volunteer to pay import value-added tax and consumption tax when importing any vehicles or yachts set forth in the list may apply at customs declaration.

V. "Zero-tariff" vehicles and yachts shall be registered and naturalized in Hainan Free Trade Port, put into service in accordance with the pertinent provisions of the competent departments of transport, civil aviation, and maritime affairs and subject to supervision. Aircraft and vessels shall be put into service on domestic and foreign routes originating from or stopping over in Hainan Free Trade Port. The service scope of yachts shall be within Hainan Province. Vehicles may be used for passenger and cargo transport to and from the mainland, with at least one end of the origin and destination in Hainan Free Trade Port and for a cumulative stay period of not more than 120 days in the mainland per year, among which "point-to-point" or "no-stay" passenger and cargo vehicles from Hainan Free Trade Port to the mainland shall not be subject to such limit of stay days.

Whoever violates the abovementioned provisions shall make up for the payment of relevant import taxes in accordance with the pertinent provisions.

VI. The Administrative Measures for "Zero-tariff" Vehicles and Yachts in Hainan Free Trade Port formulated by Hainan Province in consultation with departments of transport, civil aviation, finance, customs, and taxation clearly prescribe such contents as the procedures for determining the list of enterprises eligible for the policy, the provisions on registration, naturalization, service, and supervision of imported "zero-tariff" vehicles and yachts, criteria for identifying domestic and foreign routes for on-service aircraft and vessels originating from or stopping over in Hainan Free Trade Port, circumstances for application of the provision that vehicles may stay in the mainland for a cumulative period of not more than 120 days per year as well as the relevant methods of calculation, the identification criteria, identification departments, and administrative requirements for "point-to-point" and "no-stay" transport services as well as measures for dealing with violations.

VII. Relevant departments of Hainan Province shall strengthen supervision by means of information technology or otherwise to prevent and control possible risks, promptly investigate and deal with violations, and ensure the steady implementation of the "zero-tariff" policy for vehicles and yachts. They shall improve information sharing in supervising enterprises eligible for the policy as well as "zero-tariff" vehicles and yachts.

VIII. The circular shall come into force as of the date of promulgation.

Appendix: Hainan Free Trade Port List of "Zero-tariff" Vehicles and Yachts

Ministry of Finance
General Administration of Customs State Taxation Administration
December 25, 2020
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Translated by the Foreign Affairs Office of Haikou Municipal Government
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