The Customs Import and Export Tariff of the People's
Republic of China for 2007 (the Customs') has set out
the import tariff rate, value-added tax rate and export
drawback rate on turbo-jets, turbo-propellers and other gas
The value-added tax rate and export drawback rate are both
17 per cent. The interim duty rate on the imported parts of
turboshaft engines in 2007 is zero. In accordance with the
Asia-Pacific Trade Treaty, the agreement tariff rate on
turbofan engines exceeding 25kN is zero and other turbo-jets
exceeding 25kN is 0.5 per cent.
In 2001, the Ministry of Finance, the General Administration
of Customs and State Administration of Taxation issued the
Interim Provisions Regarding Import Tariff Exemption of
Imported Goods for Exploitation of Petroleum (Natural Gas) in
the Seas of PRC (the Interim Provisions'), effective
from 1 January 2001 to 31 December 2005. According to the
Interim Provisions, when exploiting petroleum (natural gas) in
the seas of PRC, equipments, devices, parts and components and
special tools when imported to be used directly for
exploitation are exempted from import tariff and value-added
tax. Turbines are included in this. In Appendix 1 of List of
Tax Exempted Imported Goods, turbines are included as tax
exempted imported goods.
In 2006, the Ministry issued a similar regulation, the
Provisions Regarding Import Tariff Exemption of Imported
Goods for Exploitation of Petroleum (Natural Gas) in the Seas
of PRC (the Provisions'), effective from 1 January
2006 to 31 December 2010.
But when the Provisions were issued, Appendix 1 of List of
Tax Exempted Imported Goods (the List') was not provided.
Therefore, whether turbines are still included as tax exempted
imported goods is unknown.
However, as the provisions continue the Interim Provisions,
and if the List's appendix is the same or if the relevant
provisions on turbines have not changed, it can be assumed that
turbines should be exempted from import tariff and value-added
if they cannot be produced in PRC (or if made in PRC
whose performance failed to meet requirements); or
when imported to be used directly for exploitation of
petroleum (natural gas) in the seas of PRC.
PRC authorities are also thinking of implementing
preferential import tariff policies on 16 key areas of
equipment with vital technology. The first preferential import
tariff policy for textile machineries was issued in January
2007. Relevant policies for other equipment with vital
technology will be issued gradually in the near future.
It is still not certain whether turbines are regarded as
equipment with vital technology in these 16 key areas, since no
policies on them have been issued yet. However, if so provided,
the parts and components of turbines, when imported, could
enjoy the preferential import tariff policy of first collection
and later rebate'. The import tax exemption policy, though,
would no longer apply to the whole set of equipment.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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