Five authorities including the Ministry of Finance ("MOF") have recently issued the Circular on Adjusting the Catalogs Associated with Import Tax Policies for Key Technical Equipment (the "Circular").
According to the Circular, this round of adjustments mainly relates to three catalogs, namely the Catalog of Major State-supported Technical Equipment and Products(Revised in 2019) (the "Catalog of Products"), the Catalog of Key Components and Raw Material Commodities Imported for Major Technical Equipment and Products (Revised in 2019) (the "Catalog of Merchandise") and the Catalog of Imported Major Technical Equipment and Products Not Eligible for Tax Exemption (Revised in 2019), and three catalogs will become effective from January 1, 2020. Among others, the Circular expressly states that if it is truly necessary for the domestic manufacturers that meet the specified conditions to import the commodities listed on the Catalog of Merchandise for the purpose of manufacturing the equipment or products listed on the Catalog of Products, such commodities will be exempt from tariffs and value-added tax in the import process. Where a specific year is given in the Catalog of Products or the Catalog of Merchandise to indicate the expiry of duty exemption, the duty exemption will apply to the concerned equipment, products, components and raw materials till December 31 of the given year.