According to the Notice on Tax Policies for the Flow of Goods Between the "First Line" and "Second Line" and Domestic Circulation of Goods in Hainan Free Trade Port "(Caiguanshui [2025] No. 12) jointly released by the Ministry of Finance, General Administration of Customs and State Taxation Administration of the PRC on 18 July 2025, the following policies shall be implemented for the flow of goods between the" First Line " and" Second Line "and domestic circulation in Hainan Free Trade Port from 18 December 2025:
Goods outside the catalogue of taxable imports imported through the “First Line” by eligible entities of Hainan Free Trade Port are exempt from import tariffs, import value added tax and consumption tax (hereinafter referred to as "zero tariff").
“Zero tariff "goods and their processed products entering the mainland through the" Second Line " shall pay import tariffs, import value added tax and consumption tax. If domestic value added tax has already been paid during the circulation in Hainan Free Trade Port, then no import value added tax shall be paid at this stage.
Goods containing imported materials produced by encouraged industrial enterprises in Hainan Free Trade Port, with a processing value added of 30% or more, entering the mainland through the "Second Line" may be exempted from import tariffs, but shall be subject to import value added tax and consumption tax in accordance with laws and regulations.
“Zero tariff "goods and their processed products are exempt from import tariffs, import value added tax and consumption tax when circulating among eligible entities within Hainan Free Trade Port, but shall be subject to domestic value added tax and consumption tax in accordance with laws and regulations.
Goods entering Hainan Free Trade Port through the "Second Line" from the mainland shall be managed in accordance with regulations on domestic circulation.
Goods departing from Hainan Free Trade Port through the "First Line" shall be subject to export management.
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