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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 Domestic or Foreign Invested Project Encouraged by the State” for Purchase of Imported Equipment by Foreign Invested Project

Document Regulation

This topic is governed by the Circular of the State Council on the Adjustment of Taxation Policies for Import Equipment (No. 37 [1997] issued by the State Council), the Circular of the State Planning Commission, Foreign Economic and Trade Department of the State Economic and Trade Commission, and China Customs on Implementation of Relevant Issues of State Council on the Adjustment of Taxation Policies for Import Equipment (No. 250 [1998] issued by the State Planning Commission), the Circular of the General Office of the State Council on Further Encouraging Present Foreign Investment (No. 73 [1999] issued by the General Office of the State Council), and the Circular of the National Development and Reform Commission on Relevant Issues of handling ‘Letter of Confirmation of Domestic or Foreign Invested Project Encouraged by the State’ of Foreign Invested Projects (No. 316 [2006] issued by the National Development and Reform Commission on Foreign Investment).

Please visit the “Foreign Investment Utilization” column on: www.bjpc.gov.cn.

Conditions Required for Project Handling “Letter of Confirmation of Domestic or Foreign Invested Project Encouraged by the State”

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 the Temporary Implementation Measures on Foreign Invested Project Ratification of Beijing Municipality (Beijing Development and Reform Commission 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 total of foreign exchange on the equipment should comply with the ratified document of the 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 imported equipment to be purchased.

4.    A “List of Imported 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.    A photocopy of the original project ratification document for added capital of foreign invested project.

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

7.    Other materials to be explained or provided.

Handling procedure: The project owner shall submit 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 preliminary examination on contents like 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, supplement or improvement once off; the letter of confirmation of the project shall be handled within 20 working days since the date of acceptance of the application; provided that handling time limit needs to be prolonged due to special conditions, with the ratification of the principal, it can be prolonged to 10 working days.

Consultation Hotline: +86 10 6641 5588, ~0426, ~0415