The English version is for reference only. If there is any inconsistency or conflict between the English and Chinese version, the Chinese version shall prevail.

No. 75 [2013] of the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation

The Shanghai Municipal Finance Bureau, the Shanghai Customs, and the Shanghai Municipal Office of the State Administration of Taxation:

In order to implement relevant policies in the Framework Plan for the China (Shanghai) Pilot Free Trade Zone, you are hereby notified of the import tax policies of the China (Shanghai) Pilot Free Trade Zone (“FTZ”) as follows:

I. The preferential value-added tax (“VAT”) policies in the Circular of the Ministry of Finance and the State Administration of Taxation on Adjusting the Value-Added Tax Polices for Imported Airplanes (No. 53 [2013] of the Ministry of Finance) and the Circular of the General Administration of Customs on Issues Concerning Adjusting the Import Value-Added Tax for Imported Airplanes (No. 90 [2013] of the General Administration of Customs) shall be applicable to airplanes with an empty weight of 25 tons or more purchased from overseas with the approval of relevant State authorities and leased to domestic airline companies by domestic leasing companies registered in the FTZ or their project subsidiaries.

II. Import VAT and consumption tax shall be levied as legally required on goods produced or processed by enterprises established in the FTZ and sold to the Chinese mainland through a “second line” (connecting a free trade zone and non-free-trade-zone areas). Upon application of enterprises, the policy of levying Customs duties on goods for domestic sale according to the imported materials or parts or according to the actual inspection declaration status shall be implemented on a trial basis.

III. Under the current policy framework, the necessary goods such as machines and other equipment imported by production enterprises and producer service enterprises established in the FTZ are exempted from import tax, except for goods imported by life service enterprises and goods not exempted from import tax as specified by laws, administrative regulations, and relevant provisions.

IV. Conditioned upon strict implementation of import tax policies for goods, a bonded exhibition and trading platform may be set up in a particular area.

In addition to the above import tax policies, Shanghai Waigaoqiao Free Trade Zone, Shanghai Waigaoqiao Bonded Logistics Park, Yangshan Free Trade Port Area, and Shanghai Pudong Airport Free Trade Zone under the FTZ shall implement current tax polices respectively for corresponding areas under special Customs supervision.

This Circular shall come into force upon the official formation of the FTZ.

Ministry of Finance   General Administration of Customs   State Administration of Taxation

October 15, 2013

Provided by Lawyers Working Committee of Pudong New Area