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Imported Equipment Duty Exemption

Attracted by the continual improvements in China's socio-economic development, particularly its strong economic performance, more foreign investors are looking toward China, and particularly Beijing, to target their investments.

Still, foreign investors can easily get confused and frustrated while adapting to Beijing's foreign investment policies, rules and regulations, so Business Beijing, in cooperation with the Beijing Municipal Development and Reform Commission, is beginning this Q&A column to serve foreign investors.

If you have any questions about investing in Beijing please write us via e-mail at: invest@btmbeijing.com in English; for questions in Chinese, please visit the official Web site of the Beijing Municipal Commission of Development and Reform at: http://www.bjpc.gov.cn/gwzjly/. Either way, we will find someone authoritative to provide you with the best and latest information available. Please remember: only e-mails and faxes are acceptable.

Introduction to Handling "Letter of Confirmation of Foreign Invested Project Conforming to State Industrial Policies" for Purchase of Domestic Equipment by Foreign Invested Project

Relevant Regulations

Your best introduction to this important procedure is to read the Circular on Issuance of 'Trial Measure for the Administration of Refund of Taxes Levied on Purchase of Domestic Equipment by Foreign Invested Projects' (No.111 [2006] issued by the State Administration of Taxation and the National Development and Reform Commission ) promulgated by the State Administration of Taxation and the National Development and Reform Commission, and the Circular on Beijing Municipal Commission of Development and Reform Forwarding 'Trial Measure for the Administration of Refund of Taxes Levied on Purchase of Domestic Equipment by Foreign Invested Projects' promulgated by the State Administration of Taxation and the National Development and Reform Commission (No. 1451 [2006] issued by the Beijing Municipal Commission of Development and Reform). Please visit the "Foreign Investment Utilization" column on: www.bjpc.gov.cn.

Conditions Required for Project Handling "Letter of Confirmation of Foreign Invested Project Conforming to State Industrial Policies"

1.    The project falls within the "encouraged" category of the industrial policies on foreign investments;

2.    The project has undergone project ratification conforming to regulations of Temporary Implementation Measures on Foreign Invested Project Ratification of Beijing Municipality (Beijing Development and Reform No. [2005] 2598);

3.    The domestic equipment applied for purchase is for the own use, and is excluded among the listed commodities in the Catalogue of Duty-Bound Commodities Imported by Foreign Invested Projects; the content of equipment purchase is basically clarified in the application report of the original project.

4.    Projects ratified by the development and reform administrations at the district or county level (including Administrative Commission of Beijing Economic-Technological Development Area, the same hereinafter) shall be ratified and reported to the upper level by the ratification administration of the original project;

The Project Owner Shall Prepare the Following Materials (Bookbinding according to the following order, submitting two sets): 

1.    Written application.

2.    A photocopy of the project ratification document.

3.    A project application report including the list of domestic equipment to be purchased.

4.    A "List of Purchased Domestic Equipment for the Project" affixed with the seal of the project owner and that of the development and reform administration at the district or county level in quintuplicate.

5.    Certificate of Ratification for Foreign Invested Enterprise and Business License.

6.    Other materials to be explained or provided.

Handling procedures

The project owner shall submit a written proposal to the local development and reform administration; the development and reform administration at the district or county level shall submit the application of handling letter of confirmation of the project to the municipal commission of development and reform after a preliminary examination of its contents and information such as the project owner, investment total, sum and list of the purchased domestic equipment and the items of applicable industrial policy.

Handling Time Limit

Within five working days after the municipal commission of development and reform receives the application materials, the applicant should be informed of the content demanding clarification, supplements or once-off improvements; the letter of confirmation of the project shall be handled within 20 working days from the date of acceptance of the application, provided that the handling time limit needs to be prolonged because of special conditions, with the ratification of the principal, it can be prolonged to 10 working days.

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