Ministry of Commerce, Ministry of Finance, General Administration of Customs and State Administration of Taxation, Tentative Measures for Checking of the Export of Products of Foreign-invested Enterprises in the Permitted Category Whose Products are Directly Exported in Full

Promulgated: March 31 2006
Effective: as of date of promulgation
Interpreting authorities: Ministry of Commerce in conjunction with Ministry of Finance, General Administration of Customs and State Administration of Taxation
Applicability: These Measures apply to foreign-invested enterprises (FIEs) in the permitted category whose products are directly exported in full (FIEs Whose Products are Fully Exported), that is, FIEs that are approved and certified as FIEs Whose Products are Fully Exported by examination and approval departments, in accordance with the law, and that enjoy a tax deduction and exemption policy on imported equipment, in accordance with the law, based on such certification. These Measures do not apply to FIEs Whose Products are Fully Exported, that were established before October 1 2002, and the business scope of their products may otherwise be put into the 'encouraged' category, as well as other FIEs (Article 2).

Main contents: Checking of the export of products includes verification and investigation. Verification refers to the checking of the export of products by FIEs Whose Products are Fully Exported and that were established on or after October 1 2002. Investigation refers to the checking of the export of products by FIEs Whose Products are Fully Exported and that were established before October 1 2002 (Article 3). The period of verification or investigation is five years (Article 5). FIEs Whose Products are Fully Exported and that are subject to verification of the export of their products shall, prior to January 31 each year, submit a report detailing figures on their production and export or sales of their products of the preceding year to the provincial-level department in charge of commerce of the place where they are located (Article 6). Provincial-level departments in charge of commerce and relevant departments shall, prior to the end of March each year, selectively carry out investigations on FIEs Whose Products are Fully Exported and that are still subject to investigation. Enterprises that have received notification shall submit a report detailing figures on their export or sales of products of the preceding year to the provincial-level department in charge of commerce of the place where they are located (Article 10). For FIEs Whose Products are Fully Exported, the total amount of direct exports of the preceding year shall amount to 100% of their sales revenue of products of the preceding year (Article 11). Where during the subsequent checking periods a FIE Whose Products are Fully Exported has sold its products in the domestic market and enjoyed a refund or an exemption of import duties and tax due to reasons such as changes in the business environment and market, the FIE shall itself apply to the local customs authority to repay the import duty and tax payments refunded or exempted in the previous years, within a month, and import duty and tax refunds payable for the current and subsequent years shall no longer be paid (Article 13).
Related legislation: Circular on Adjustment of Certain Preferential Import Tax Policies, Sep 4 2002, CLP 2002 No.8 p.13