(All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.)
Department of Finance of Hainan Province,
Haikou Customs,
Hainan Provincial Tax Service of State Taxation Administration:
In order to implement the Overall Plan for the Construction of Hainan Free Trade Port, with the approval of the State Council, the "zero-tariff" policy for vehicles and yachts in Hainan Free Trade Port is hereby notified as follows:
I. Before the whole island of Hainan enters into independent customs operations, operational vehicles and yachts including vessels, aircrafts and cars that are imported by enterprises registered in Hainan Free Trade Port as independent legal personality and engaged in transportation and tourism (in case of aviation enterprises, Hainan Free Trade Port shall be their main operation base) for transportation and tourism purpose will be exempted from import duties, import value-added tax and consumption tax.
The list of enterprises that meet the conditions for enjoying the policy shall be determined by the competent departments of Hainan Province for transportation, culture and tourism, market regulation, and maritime safety and CAAC Central and Southern Regional Administration, in concert with the Department of Finance of Hainan Province, the Haikou Customs and Hainan Provincial Tax Service of State Taxation Administration by reference to the transportation and tourism-related items in the catalogue of industries encouraged by the Hainan Free Trade Port and be adjusted dynamically.
II. Vehicles and yachts that enjoy the "zero-tariff" policy shall be subject to the positive list management (See the appendix for specific scopes). The list is subject to adjustments by the Ministry of Finance, the General Administration of Customs, the State Taxation Administration in concert with the relevant departments based on Hainan's actual needs and regulatory conditions.
III. Vehicles and yachts subject to "zero-tariff" should only be used for operation by enterprises in the Hainan Free Trade Port that meet the policy conditions and are subject to customs supervision. If they need to be transferred due to corporate bankruptcy or other reasons, customs approval shall be obtained and relevant procedures shall be completed before the transfer. If they are transferred to entities that do not meet the conditions for enjoying the policy, import-related taxes shall be paid in accordance with provisions. The transfer of vehicles and yachts subject to "zero-tariff" shall be subject to domestic value-added tax and consumption tax according to regulations.
IV. Enterprises that volunteer to pay import value-added tax and consumption tax when importing vehicles and yachts set out in the list may apply at customs declaration.
V. Vehicles and yachts subject to "zero-tariff" shall be registered and granted Chinese nationality in the Hainan Free Trade Port, operate in accordance with the relevant provisions of the competent departments for transportation, civil aviation, and maritime safety, and be subject to supervision. Aircrafts and vessels should operate domestic or foreign routes that depart from or stop over at Hainan Free Trade Port. Yachts shall operate within Hainan Province. Vehicles may engage in passenger or cargo transportation to and from the mainland and at least the departure place or the destination must be within the Hainan Free Trade Port, and the accumulated time of stay in the mainland shall not exceed 120 days each year. Among them, passenger and cargo transportation vehicles that operate "point-to-point" transportation from Hainan Free Trade Port to the mainland or that start to return to Hainan Free Trade Port immediately when they arrive at the mainland are not subject to the said limit of number of days.
In case of violation of the above provisions, relevant import taxes shall be paid in accordance with relevant provisions.
VI. Hainan Province shall, in consultation with the transportation, civil aviation, finance, customs, tax and other departments, formulate the Measures for the Administration of Vehicles and Yachts Subject to the "Zero-tariff" Policy of Hainan Free Trade Port to specify the procedures for determining the list of enterprises that meet the policy conditions, and the registration, naturalization, operation, and supervision of imported vehicles and yachts subject to "zero-tariff", the standards for determining whether aircrafts and vessels operate domestic or foreign routes starting from or stopping over at Hainan Free Trade Port, the circumstances under which vehicles may not accumulatively stay in the mainland for more than 120 days each year and the calculation method; Hainan also shall lay out the standards, competent departments and management requirements for "point-to-point" and "returning immediately after arriving" transportation services, and handling methods for violations of provisions.
VII. Relevant departments of Hainan Province shall strengthen supervision through information-based methods and other means to prevent and control risks, promptly investigate and deal with violations, ensure the steady implementation of the "zero-tariff" policy for vehicles and yachts, and improve the sharing of information on the supervision of enterprises meeting policy conditions and vehicles and yachts subject to "zero-tariff" among the competent departments of Hainan Province.
VIII. The Circular shall come into force as of the date of announcement.
Appendix: List of “Zero-tariff” Vehicles and Yachts in Hainan Free Trade Port
Ministry of Finance
General Administration of Customs
State Taxation Administration
December 25, 2020
