Circular of the State Council on Adjusting the Tax Policy of Imported Equipments

Circular of the State Council on Adjusting the Tax Policy of Imported Equipments


Circular of the State Council on Adjusting the Tax Policies of Imported Equipment

Guo Fa [1997] No.37

December 29, 1997

For the purposes of further expanding foreign capital utilization, introducing foreign advanced technologies and equipment, promoting industrial restructuring and technological advancement and maintaining a sustainable, rapidly growing and healthy development of the national economy, the State Council has decided that as of January 1, 1998, tariffs and value-added tax on imports shall be exempted within the prescribed scope with respect to imported equipment for domestic investment projects and foreign investment projects, of which the development is encouraged by the State. The relevant questions are hereby notified as follows:

I. Scope of Tax Exemption for Imported Equipment
1. Equipment imported by foreign investment projects which involve technology transfer and fall within the Category of Encouraged Equipment and the Restricted B Category of the Catalogue for the Guidance of Foreign Investment Industries for own use within the total amount of investment, except for those commodities listed in the Catalogue of Imported Commodities Not Exempt from Taxation for Foreign Investment Projects, shall be exempted from tariffs and value-added tax on imports.
Equipment imported for own use by projects utilizing loans from foreign governments or loans from international financial institutions and non-priced imported equipment for processing trade provided by foreign businesses, except for those commodities listed in the Catalogue of Imported Commodities Not Exempt from Taxation for Foreign Investment Projects, may refer to the preceding paragraph in their implementation, that is, tariffs and value-added tax on imports shall be exempted.
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