Introduction of the taxation policy of import equipment of P.R.C.

2010-6-28 16:34:49  

The Circular of the State Council Concerning the Adjustment in the Taxation Policy of Import Equipment (GuoFa (1997) No.37, hereinafter referred to as the Circular) publicized in 1997,is one of the most important regulatory documents concerning the taxation policy of import equipment in China. In a sense, it is the foundation for the administration system related to tax exemptions for import equipment.

    According to the Circular, since January 1, 1998, import duty and VAT can been exempted within the prescribed scope with respect to import equipment of domestic investment projects and foreign business investment projects the development of which is encouraged by the state. It is noticeable that the Circular  publicized  directly by the State Council, which is still in effect now,  has the same legal force as administrative regulations.  

    The relevant aspects of taxation policy for Import Equipment are notified in the Circular, such as Scope of Tax Exemption, Administration of Tax Exemption, and Tax Exemption for Transfer Projects. The so-called "Transfer Projects" refers to technological transformation projects approved prior to March 31, 1996; foreign business investment projects and domestic investment projects approved between April 1, 1996 and December 31, 1997; and projects utilizing foreign government loans and loans of international financial institutions between January 1, 1995 and December 31, 1997.

Tags: taxation policy of import equipment