China Customs Duty, Tax Advisory - Conpak CPA Limited

Customs Duty

Tariff is chargeable on all goods permitted to be imported into or exported out of the People's Republic of China. There are four levels of import tariff rates and one level of export tariff rate.

Requirement of Place of Origin

Pursuant to international practices, China will apply different tariff rates for imported goods with different places of origin. Currently, it basically applies two internationally accepted origin criterias which are "Whole Origin Production Criterion" and "Substantial Processing Criterion".

Dutiable Value

  • Dutiable Value of Import Goods
    The dutiable value for imported goods shall be examined and determined by the customs on the basis of transaction value, which generally comprises the freight, the associated expenses and the insurance premiums incurred prior to the arrival and unloading of the goods at the importing place within the People's Republic of China; if the transaction value of exported goods is indeterminable, it will be estimated by the customs according to the law.
  • Dutiable Value of Export Goods
    The dutiable value of exported goods shall be examined and determined by the customs on the basis of the transaction value of the goods to be sold abroad, which generally comprises the freight, the associated fees and insurance premiums incurred prior to the arrival and unloading of the goods at the exporting place within the territory of the People's Republic of China, but excluding the tariffs therein contained; if the transaction value of export goods is indeterminable, it will be estimated by the customs according to the law.

Tariff Rate

By 2005, the average level of the tariffs imposed by China was 9.7%, as the specific tariff rate varies subject to different varieties of goods.

Computation of Tariff Payable

  • Computation of ad valorem tariff formula is as follows:
    Tariff Payable = Quantity of Taxable Import/Export Goods × Unit Dutiable Value × Tariff Rate
  • Computation of specific unit tariff in the following formula:
    Tariff Payable = Quantity of Taxable Import/Export Goods × Unit Tariff
  • Computation of composite tariff payable:
    China now adopts a composite tariff which first comprises specific unit taxation and ad valorem taxation secondly
    Tariff Payable = Quantity of Taxable Import/Export Goods × Tariff per Unit Goods + Quantity of Taxable Import/Export Goods ×Unit Dutiable Value × Tariff Rate
  • Computation of sliding-scale tariffs payable:
    Sliding-scale tariff is a kind of special ad valorem tariff imposed at different rates as it is applicable subject to different prices of goods, which is chargeable at tariff rates fixed from high to low or from low to high and subject to the prices of imported goods
    Tariff Payable = Quantity of Taxable Import/Export Goods ×Unit Dutiable Value ×Tariff Rate
    Tariff Payable = Quantity of Taxable Import/Export Goods ×Unit Dutiable Value ×Tariff Rate

Tariff Payment

Tariff payers shall, within 15 days from the date of notice demanding tariff sent out by customs, pay the tariff to the banks designated by the customs.

Tariff Preferences

  • Goods under a single invoice whose tariff payable is less than RMB50
  • The articles for advertising purpose or to be used as samples and therefore of no commercial value
  • The fuel, materials necessary for the journey and carried by means of transport that enter into or exit China
  • The materials, parts and fittings re-exported after processing materials supplied by clients
  • The showpieces, construction machinery, instruments and others, which are allowed to enter into or exit China temporarily and are to be re-carried into or out of China within six months, are temporarily exempt from tariff

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