Laws of the People's Republic of China

The Interim Provisions Concerning the Exemption of Import Duties from the Articles Used for the Development of Science and Technology have been deliberated and adopted by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation. They are hereby promulgated and shall go into effect as of February 1, 2007.The Interim Provisions Concerning the Exemption of Import Duties from the Articles Used for Scientific Research and Teaching as approved by the State Council on January 22, 1997 and promulgated by Decree No. 61 of the General Administration of Customs on April 10, 1997 have been abolished simultaneously. Minister Jin Renqing

Director Mou Xinsheng

Director Xie Xuren

January 31, 2007

Interim Provisions Concerning the Exemption of Import Duties from the Articles Used for the Development of Science and Technology

Article 1

For the purpose of promoting scientific research and technological development, pushing scientific progress, and regulating the duty-free import of articles used for development of science and technology, the present Provisions are formulated in accordance with the decision of the State Council concerning the approval of a the implementation of tax preferential policies for the import of articles used for scientific research and teaching.

Article 2

The customs import duties, value-added taxes of the import link and consumption taxes shall be exempted, in case the following scientific research and technological development institutes, before December 31, 2010 and within reasonable quantities, import the articles for the development of science and technology which can not be made in China or whose performances can not meet the demand:

(1)

the enterprises restructured during the reform of scientific and technological system as verified and approved by the Ministry of Science and Technology jointly with the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation, and the institutions entering into the enterprises and mainly engaging in scientific research or technological development;

(2)

the national project research centers as verified and approved by the National Development and Reform Commission jointly with the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation;

(3)

the enterprise technological centers as verified and approved by the National Development and Reform Commission jointly with the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation;

(4)

the national key laboratories and national project technological research centers as verified and approved by the Ministry of Science and Technology jointly with the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation; and

(5)

other institutions of scientific research and technological development as verified and approved by the Ministry of Finance jointly with other related departments under the State Council.

Article 3

The specific scope of articles used for the development of science and technology that are exempted from import duties shall be determined in accordance with the List of the Articles Used for the Development of Science and Technology That Are Exempted from Duties as attached to the present Provisions.

The Ministry of Finance may, together with other relevant departments of the State Council, promptly adjust the List of the Articles Used for Development of Science and Technology That Are Exempted from Duties on the basis of the demand for the articles used for development of science and technology as well as the domestic production and development situation.

Article 4

The articles imported for the development of science and technology with the duties exempted in accordance with the present Provisions shall be directly used for scientific research and technological development of the importing entity itself, and may not be illegally transferred, used for other purposes or handled in other forms.

Article 5

The articles for scientific research and technological development as imported by those institutions as verified and approved by the customs house with the duties exempted may be used by any other institution for the scientific research or technological development.

Article 6

In case any institution violates legal provisions by illegally transferring, misappropriating or disposing of in other forms the articles imported for the development of science and technology with the duties exempted, it shall be punished in accordance with the related provisions, and may not enjoy this tax preferential policy for one year; and if any crime is committed, the institution concerned may not enjoy this tax preferential policy for three years.

Article 7

The General Administration of Customs shall, under the present Provisions, formulate the specific measures of the customs house for implementation.

Article 8

The present Provisions shall go into effect as of February 1, 2007.

Appendix: List of the Articles Used for the Development of Science and Technology That Are Exempted from Duties

(1)

analyzing, scaling, checking, measuring, observing and signaling instruments, meters and accessories thereof used for research, development and scientific experiment;

(2)

laboratory equipment that may provide necessary conditions for scientific research and technological development (excluding pilot-scale experiment equipments);

(3)

computer work stations, computers of medium or large scale;

(4)

special parts and fittings imported separately within the customs control period for maintaining the instruments, meters and equipments that have been imported with the duties exempted in accordance with the present Provisions, or for improving and extending functions of such instruments, meters and equipments;

(5)

books, newspapers and periodicals, lecture notes and computer software in various forms;

(6)

specimens and samples;

(7)

materials used for experiments;

(8)

animals used for experiments;

(9)

medical instruments and related accessories for research, development, scientific experiment and teaching (limited to medical colleges or majors and technological development institutes);

(10)

fine varieties of plants and seeds limited to scientific research or technological development institutes engaging in agriculture or forestry);

(11)

professional musical instruments and audio-video materials (limited to scientific research or technological development institutes engaging in art);

(12)

sports appliances for specific purposes (limited to scientific research or technological development institutes engaging in sports); and

(13)

sample cars which are not driven by petrol power or diesel-oil power and are used for research and development (limited to car research and development institutes).