Import duties and taxes related to foreign trade and business

Import duties and taxes related to foreign trade and business

Since its WTO accession China has fulfilled its tariff reduction commitment. The overall level of import tariffs has dropped to an average of 9.8%, with agricultural products at 15.2%, and industrial goods at 8.95%. To encourage imports, lower provisional tariffs have been applied to 209 types of imported products w.e.f. June 2007. China as member of WTO Information Technology Agreement grants duty free import on all information technology products such as computers, parts and components.
On line search on China import tariff rates on all categories of Harmonized System Commodity codes are available by checking here (text in Chinese).
Export tax of 142 types of products was increased, including 80 types of iron and steel products up by 5% to 10%, steel billets, steel ingots and pig iron export tax rates up from 10% to 15% from 1 June 2007.
Anti-dumping and countervailing duties may be imposed on imported goods that pose a threat to Chinese national industries. Imported agricultural products subject to tariff rate quotas include wheat, corn, rice, soybean oil, rapeseed oil, palm oil, sugar, cotton and wool.
VAT on imported goods at basic rate of 17% for general goods and at a lower rate of 13% for some foodstuffs, grains and edible vegetable oils, gas and other energy products for domestic use, books and newspapers, magazines, feedstuffs and fertilizers, etc. Foreign-invested export processing enterprises are required to pay VAT on imported raw materials, parts and components. Upon exports, the paid VAT will offset the VAT payable for the part of domestic sale goods. Excess will be rebated.
China's Ministry of Finance, along with State Administration of Taxation, National Development and Planning Commission, Ministry of Commerce and the General Administration of Customs jointly released the official plan for the adjustment of export rebate policy on June 19 2007. Tax refund for 553 highly energy consuming, high polluting and resource intensive products are eliminated, while the VAT refund rates of 2,268 products described as 'easy to trigger trade frictions' are to be reduced. The new rate was adopted as per July 1, 2007.
Consumption tax is applied to imports of cigarettes and tobacco, alcoholic drinks, cosmetics, skin and hair care products, jewellery and precious stones, motor cycles, motor cars and tyres, gasoline and diesel oil, golf clubs and equipment, high price watches, pleasure crafts, chopsticks and wood floorings.
Business tax of 3% to 20% is applied in the sectors of transportation, post and telecommunications, finance and insurance, construction, transfer of tangible assets and sale of immovable property in China. Business Tax of 10-15% is applied to entertainment sector.
Corporate income tax will be lowered to 25% (from 30%) for both domestic and foreign-invested enterprises from January 2008. Tax concessions are still available for enterprises in advanced technology and infrastructural building in new areas.
Individual income tax for foreign nationals working in China is charged at progressive rates from 5% to 45%.