Joint Announcement on Policies for Deepening VAT Reform (Ministry of Finance, General Administration of Customs(i.e. GAC), State Administration of Taxation Joint Announcement [2019] No. 39 )

From 1 April 2019, for general VAT payers' sales activities or imports that are subject to VAT at an existing applicable rate of 16% or 10%, the applicable VAT rate is adjusted to 13% or 9% respectively. For exported goods or labour services that are subject to VAT at 16%, with the applicable export refund at the same rate, the export refund rate is adjusted to 13%; and for exported goods or cross-border taxable activities that are subject to VAT at 10%, with the export refund at the same rate, the export refund rate is adjusted to 9%.

 

Announcement on the Imminent Expiration of Certain Anti-dumping and Anti-subsidy Measures in the Second Half of 2019 (Ministry of Commerce Announcement [2019]) No. 8)

For informational purposes, the Ministry of Commerce announced anti-dumping and anti-subsidy measures that are set to expire during the period from 1 July to 31 December 2019. Two commodities that are affected by these expirations are single-mode optical fibre and tert-Butylhydroquinone (TBHQ), both of which are imported from India. Please refer to the annexes of the announcement for details, as the Ministry of Commerce will not announce the expiry dates of individual measures.

 

Announcement of the Customs Tariff Commission of the State Council (i.e. CTC) on the Continuation of the Suspension of Additional Tariffs on Motor Vehicles and Parts Originating from the U.S. (CTC Announcement [2019] No. 1 )

From 1 April 2019, the imposition of the additional 25% tariff on 28 items listed in Annex 1 of <the Announcement on Suspending the Imposition of Additional Tariffs on Motor Vehicles and their Parts Originating from the U.S. issued by the Customs Tariff Commission> (CTC Announcement No. 10 [2018]) continues to be suspended. The imposition of the additional 25% tariff on 116 items listed in Annex 2 of CTC Announcement No. 10 [2018] continues to be suspended; and the imposition of the additional 5% tariff on 67 items listed in Annex 3 of CTC Announcement No. 10 [2018] continues to be suspended.

 

Joint Announcement on Relevant Arrangements for China Compulsory Certification (CCC) Exemption (State Administration for Market Regulation (i.e. SAMR), GAC Joint Announcement [2019] No. 13 )

From 1 April 2019, the SARM will take over matters related to CCC exemption. Relevant applicant entities can still submit documents through the Management System for Tests and Processing of CCC-exempted Imports and Special Purpose Imports, and application and administration requirements remain unchanged.

The SAMR will take charge of organising and supervising the implementation of the CCC system. The GAC will be responsible for the authentication of imported products subject to CCC. The SAMR and GAC will establish checking mechanisms via interconnected networks, through which they can collaborate with each other on CCC certificates and supporting documents.

 

Announcement on Issuing the Measures for the Administration of the Origin of Imported and Exported Goods under the Free Trade Agreement between the People's Republic of China and Chile (GAC Announcement [2019] No. 39 )

The GAC announced administrative measures with respect to determining the origin of imported and exported goods under <the Free Trade Agreement between the People's Republic of China and Chile>. Please refer to the annexes of the announcement for details.

 

Announcement on Issues Concerning the Expansion of the TIR Convention Pilot Programme (GAC Announcement [2019] No. 41 )

The GAC has decided to include Jeminay Port, Baktu Port, Alashankou Port and Dulata Port under the ports covered by Chinese <TIR transport pilot programme>, in addition to the existing ports covered by the programme (Khorgos Port, Irkeshtan Port, Erlianhaote Highway Port, Manzhouli Highway Port, Suifenhe Port and Dalian Port). Other matters related to the pilot programme for the implementation of the TIR Convention will be governed by GAC Announcements [2018] No. 30 and [2018] No. 42 . The announcement became effective on 25 March 2019.

 

Announcement on Issuing the Criteria for Determining the Financial Status Indicators in the Customs Certified Enterprise Standards (GAC Announcement [2019] No. 46 )

The GAC announced the criteria for determining accounting information, overall financial status, formulae used to calculate relevant indicators, and the points assigned to each indicator. Please refer to the announcement and its annex for details regarding the criteria.

 

Announcement on Ceasing the Issuance of GSP Certificates of Origin for Exports to Japan (GAC Announcement [2019] No. 48 )

Since the Japanese Ministry of Finance has decided to cease granting Chinese exports to Japan any tariff preference under the Generalised System of Preferences (GSP) from 1 April 2019, Chinese customs will no longer issue the GSP Certificates of Origin and relevant certificates for processing with materials imported from Japan, for goods exported to Japan. If a consigner of goods that are exported to Japan needs a certification regarding goods origin, customs may issue a non-preference certificate of origin.

 

Announcement on Pilot Reform for the Printing of Certificates of Origin (GAC Announcement [2019] No. 49 )

The GAC has announced that it will launch a pilot reform programme for the self-help printing of certificates of origin in provinces and municipalities such as Beijing, Tianjin, Shanghai, Jiangsu, Guangdong and Chongqing from 25 March 2019.

 

Announcement on Streamlining the Entry and Exit Administration of Comprehensive Bonded Zones (CBZ) (GAC Announcement [2019] No. 50 )  

Streamlining the entry and exit management of CBZs defines that domestic goods and articles are allowed to enter and leave the CBZ in a simplified administrative mode if they are not subject to export tariffs, import & export licenses, or tax refunds, and are not covered by customs' statistical surveys. Goods and articles eligible for the simplified administrative mode are allowed to enter and leave CBZ without submitting customs declaration documents or record-filing lists. Enterprises in the CBZ must maintain daily records of the goods and articles entering and leaving CBZ to ensure their entry and exit are traceable.

The announcement entered into force immediately after release.

 

Joint Announcement on the Expanded Online Verification of Three Import & Export Licenses Including the Customs Clearance Document for Imported Drugs (GAC, National Medical Products Administration Joint Announcement [2019] No. 56 ）

From 25 March 2019, online verification regarding electronic data of <Clearance Document for Imported Drugs>, <Drug Import Permits> and <Drug Export Permits> and electronic customs declaration data for imports and exports was launched nationwide.

Medical products administration authorities will issue the aforesaid documents in accordance with relevant laws, and transfer the electronic data to Customs which will verify these documents during the clearance process and conduct import and export formalities accordingly. For documents issued before the implementation of online verification, enterprises may go through import/export formalities with Customs within the valid period using paper documents.

Enterprises may log into the China International Trade Single Window website to check the transmission status of their electronic document data.

 

Announcement on Launching E-books for Outbound Processing (GAC Announcement [2019] No. 57 )

From 1 April 2019, the GAC formally launched E-books for outbound processing. Enterprises may go through formalities including opening an E-books through the China International Trade Single Window website. Enterprises that have opened E-books for outbound processing do not need to follow the requirement that states “outbound processing goods shall be exported and re-imported at the same port” in article 8 of the <Announcement of the GAC on Issues Relating to Outbound Processing> (GAC Announcement No. 69 [2016]). They can select the port for export and import that suits their business needs. Existing paper books for outbound processing can still be used within the valid period.

 

Announcement on Issues Concerning Tax Filing Formalities for Royalties (GAC Announcement [2019] No. 58 )

Taxpayers should confirm the existence of taxable royalties in the “Royalties Confirmation” column when filling the customs declaration form. Exported goods, processing trade and other customs-supervised bonded goods (excluding bonded goods for domestic sale) are exempted from declaration. If taxable royalties related to imported goods are directly or indirectly paid to the seller or other related parties, taxpayers should fill “Yes” in the “Royalties Confirmation” column no mater the royalties are included in the price actually paid or payable for import goods or not. If no taxable royalties related to import goods are directly or indirectly paid to the seller or other related parties, taxpayers should fill “No” in the column.

If a taxpayer has paid the taxable royalties when declaring imported goods, the amount paid should be filled in the “Miscellaneous Fees” column instead of the “Total Price” column. Customs will calculate the tax to be imposed on the royalties using the tariff rate and exchange rate prevailing on the date when the import goods were declared.

If a taxpayer did not pay the taxable royalties when declaring imported goods, the taxpayer should go through the tax filing formalities with Customs within 30 days of the payment and complete the <Taxable Royalties Return> (see the annexes of the announcement).

Beijing Customs Announcement [2019] No. 6

Based on relevant regulations, Customs records the declaration errors when entities go through customs declaration formalities. Entities may search their declaration errors through “Customs and Enterprise Cooperation Platform” (关企合作平台) in “Enterprise Import and Export Credit Management System”.

 

Announcement on the Pilot Implementation of the “Advanced Declaration and Inspection/Release after arrival” Export Model at Waigaoqiao Port (Shanghai Customs Announcement [2019] No. 1)

Enterprises that are classified as advanced certified enterprise may go through customs declaration formalities using the “Advanced Declaration and Inspection/Release after arrival” model when exporting local goods through Waigaoqiao Port.

if the goods to be exported are complete and containerised, and electronic data of the manifest has been obtained, exporters and customs brokers may declare them to customs within three days before the arrival of them at the customs supervised premises. Customs will inspect the goods upon their arrival at the customs supervised premises, and complete the clearance procedure.

Northen China 
Eric Zhou
China Trade and Customs Services
Lead Partner
Email: ec.zhou@kpmg.com
Tel: +86 (10) 8508 7610

Helen Han    
Partner 
Email:h.han@kpmg.com
Tel:+86 (10) 8508 7627       

Eastern and Western China
Anthony Chau 
Partner
Email: anthony.chau@kpmg.com
Tel: +86 (21) 2212 3206

Dong Cheng
Partner
Email: cheng.dong@kpmg.com
Tel: +86 (21) 2212 3410

Rachel Tao
Director
Email: rachel.tao@kpmg.com
Tel: +86 (21) 2212 3473   

Southern China
Grace Luo
Partner
Email: grace.luo@kpmg.com
Tel: +86 (20) 3813 8609

Vivian Chen
Partner
Email: vivian.w.chen@kpmg.com
Tel: +86 (755) 2547 1198

Phillip Xia
Director
Email: philip.xia@kpmg.com
Tel: +86 (20) 3813 8674

Hong Kong
Daniel Hui    
Partner
Email: daniel.hui@kpmg.com
Tel: +852 2522 7815