Laws of the People's Republic of China

State Administration of Taxation

Circular of the State Administration of Taxation on Relevant Tax Issues Concerning the Pilot Joint Development of Bonded Areas and Port Zones

Guo Shui Fa [2004] No.117

To State tax bureaus of various provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan:

In accordance with the Official Reply of the General Office of the State Council on Approving the Pilot Joint Development of Shanghai Waigaoqiao Bonded Area and Port Zone (Guo Shui Hanˇ˛2003ˇłNo.81), it is approved to carry out pilot joint development of Shanghai Waigaoqiao bonded area and port zone, and, in Waigaoqiao port zone with enclosed fence, to allocate a piece of land covering an area of 1.03 square meters as logistics zone of Waigaoqiao bonded area (hereinafter referred to as the "bonded logistics zone"). Related tax policies to be implemented in such bonded logistics zone are hereby released as follows:

1.

A bonded logistics zone is a particular area which is approved by the State Council and administered by the Customs in a closed way.

2.

Goods transported into the bonded logistics zone by enterprises outside the zone (hereinafter referred to as enterprises outside the bonded logistics zone) shall be regarded as exported goods. Such enterprises shall, upon presentation of goods declaration for exportation (special for export tax refund) issued by the Customs in conjunction with other required certificates, apply to the competent tax authority for tax refund (exemption). Enterprises outside the bonded logistics zone as used in these Measures shall refer to enterprises authorized with the right to import or export (including industry and trade companies engaged in foreign business, foreign-funded enterprises and productive enterprises with the right to import or export)and productive enterprises which have no right to import or export but entrust other enterprises with such right to make export declaration.

3.

After receiving the application filed by enterprises outside the bonded logistics zone for tax refund (exemption), the competent tax authority shall conduct examination and verification in strict compliance with the Circular of the State Administration of Taxation on Printing and Issuing the Interim Measures on Taxation Administration of Export Processing Zones (Guo Shui Faˇ˛2000ˇłNo.155), the Circular of the State Administration of Taxation on Tax Refund for Water, Electricity and Gas Consumed in Export Processing Zones (Guo Shui Faˇ˛2002ˇłNo.116), the Official Reply of the State Administration of Taxation on Tax Refund for Exportation of Goods and Materials for Capital Construction in Wuhu Export Processing Zone(Guo Shui Hanˇ˛2004ˇłNo.805)and other pertinent documents, and shall process the tax refund application after no incompliance and incorrectness has been found in such examination and verification.

4.

With regard to the sales, export and consigned processing of goods by enterprises located in the bonded logistics zone, tax policies applicable to such enterprises as well as tax administration shall be carried out by applying mutatis mutandis Document Guo Shui Faˇ˛2000ˇłNo.155.

5.

This Circular shall come into effect as of the date when the bonded logistics zone is checked and accepted by the General Administration of Customs, the State Administration of Taxation and other pertinent departments and is operated in a closed way by the customs.

State Administration of Taxation

September 13, 2004