China's customs duty exemption and reduction classification system serves as a crucial framework for managing import/export taxation. This classification aims to optimize automated customs declaration systems and EDI clearance processes while providing foundational data for customs tariff databases. The system not only clarifies tax administration directions but also facilitates policy implementation and supervision.
I. Classification of Duty Exemption and Reduction
The customs duty codes are primarily divided into five categories: statutory taxation, statutory duty reduction, special duty reduction, other duty reductions, and provisional tariff rates. The special duty reduction category is further subdivided into four types of tax policies implemented according to region, purpose, trade nature, and enterprise type with funding sources.
II. Structure of Duty Codes
Each duty code consists of three digits: the first digit represents the category, while the second and third digits indicate the sequential number of duty exemption/reduction items within that category.
General Taxation for Import/Export Goods
Code "101" applies to goods subject to standard tariffs, VAT, and other taxes according to current laws and regulations. This default classification covers all goods unless specific exemption provisions apply, including those subject to provisional tariff rates.
Gratis Aid Import/Export Materials
Code "201" designates materials provided as gratuitous aid by foreign governments and international organizations to China. This includes aid materials specified in bilateral agreements and assistance from UN agencies.
Other Statutory Duty-Reduced Import/Export Goods
Code "299" applies to goods receiving duty reductions under laws and regulations, excluding gratis aid materials. This category covers compensation materials without cost and commercial-value-free advertising items.
Special Economic Zone Imports/Exports
Code "301" applies to self-use materials imported and goods exported by special economic zones (like Shenzhen and Zhuhai). These typically enjoy tax refunds after payment within state-approved quotas.
Bonded Zone Imports
Code "307" governs self-use materials imported into bonded zones under special policies, including infrastructure construction materials and enterprise production equipment.
Other Special Policy Zone Exports
Code "399" applies to exports from economic development zones and similar areas, typically covering products processed with domestic materials that gain value-added benefits.
Scientific/Educational Imports
Code "401" facilitates research and education by exempting duty on imported scientific/educational materials required by institutions.
Enterprise Technology Upgrade Imports
Code "403" encourages technological advancement by reducing duties on imported equipment and materials for enterprise upgrades.
National Major Project Imports
Code "406" applies to equipment imports for State Council-approved major construction projects that qualify for duty reductions.
Infrastructure Construction Imports
Code "412" covers specialized equipment imports for communications, port, and other infrastructure projects.
Disabled Persons' Special Products
Code "413" supports welfare initiatives through duty-free imports of special equipment for disabled individuals and institutions.
Deep-Sea Fishery Products
Code "417" applies to aquatic products caught by licensed deep-sea fishing enterprises.
Designated Vehicle Production Components
Code "418" governs imports of key components for state-designated automobile manufacturers.
Petroleum Exploration Imports
Offshore ( "606" ) and onshore ( "608" ) oil/gas exploration equipment imports fall under these codes for State Council-approved projects.
Disaster Relief and Processing Trade
Disaster relief donations ( "801" ) and foreign-donated processing equipment ( "501" ) have specific duty provisions.
Processing Trade Materials
Materials for processing ( "502" ) and export products ( "503" ) in processing trade arrangements receive special duty treatment.
Border Trade
Code "506" applies to small-scale border trade imports through designated ports.
Foreign-Invested Enterprise Imports
Joint ventures ( "601" ), cooperative enterprises ( "602" ), and wholly foreign-owned enterprises ( "603" ) receive duty reductions on production/management equipment.
Loan and Encouraged Projects
Government loan projects ( "609" ) and encouraged development projects ( "789" ) qualify for special duty reductions.
Special State Council Approvals
Codes "898" (special approvals) and "999" (exceptional cases) cover unique situations not fitting standard classifications.
Provisional Tariff Rate Goods
Code "998" applies to imports subject to internal provisional tariff rates per domestic policy guidelines.
