2014-09-22-KPMG_China-自2015年1月1日起我国取消加工贸易项下进口钢材保税政策_3页_362kb

CHINA TAX ALERT Issue 26 September 2014

Importation of steel materials can no longer enjoy bonded treatment under processing trade from 1 January 2015

Background

On 2 July 2014, the Ministry of Finance (MOF), General Administration of Customs (GAC) and State Administration of Taxation (SAT) jointly issued 'The Notice on Revoking the Bonded Treatment for Steel Materials Imported under Processing Trade' (Cai Guan Shui [2014] No. 37), which revoked the bonded treatment for steel materials under 78 tariff codes, effective 1 January 2015.
A supplementary notice (Cai Guan Shui [2014] No. 54) extended the transitional period until 1 January 2015.

Key Points

1. Unless meeting specific conditions outlined below, bonded treatment for imported steel materials under 78 tariff codes will be revoked effective 1 January 2015.
2. Exception: If a contract was signed before 31 December 2014 and steel materials imported before 30 June 2015, bonded treatment may continue.
3. Applicability: The policy applies to enterprises in customs special supervision areas, except for those already established before 31 July 2014, unaffected by the revocation.

KPMG Observations

• Aligned with the State Council's directive on resolving excess production capacity.
• Further revocations for other steel tariff codes are expected; enterprises should plan accordingly.
• Prioritize importation under the existing exceptions to mitigate risks.