Tax News Update    Email this document    Print this document  

February 6, 2020
2020-0317

China adjusts certain 2020 commodity import tariff rates

Starting from 1 January 2020, China's import tariff rates for certain commodities have been adjusted in accordance with the "Notice of the Customs Tariff Commission of the State Council on the 2020 Adjustment Plan for Import Tentative Tax Rates and Other Adjustments" (CTC Public Notice [2019] No. 50). In addition, China's interpretation of domestic subheading of import and export tariffs has been revised as per the "Notice of the Customs Tariff Commission of the State Council on Adjusting Interpretation of Certain Domestic Subheadings" (CTC Public Notice [2019] No. 51).

Major Adjustments

Import Tariffs

According to CTC Public Notice [2019] No. 50, from 1 January 2020, import tariffs for certain commodities were adjusted and are summarized as below:

Tariff type

Adjustments

Most Favored Nation (MFN) rate

  • From 1 January 2020, the import tariffs for 859 commodities (excluding the commodities with tariff quotas) will be reduced (the application of tentative import tariffs).
  • From 1 July 2020, the tentative import tariffs for seven information technology products will be repealed.
  • On 1 July 2020, a further tariff reduction for information technology products listed in the Schedule of the Amendment to the Tariff Concession Schedule of the People's Republic of China to Join the World Trade Organization will be implemented.

Tariff quota

  • The tariff quotas continue to apply to eight commodities, including wheat. The quota tariff rate for fertilizers, urea, compound fertilizer, ammonium hydrogen phosphate will remain unchanged at 1%. Sliding duties shall continue to be imposed on a certain quantity of cotton imported beyond the quota.

Conventional tariff rates

  • From 1 January 2020, new reduced rates will be implemented under trade agreements or preferential rate arrangements concluded with New Zealand, Peru, Costa Rica, Switzerland, Iceland, Singapore, Australia, South Korea, Chile, Georgia, Pakistan, and agreement rates for the Asia-Pacific Trade Agreement will be reduced.
  • From July 1, 2020, in accordance with the provisions of the bilateral trade agreement between China and Switzerland and the Asia-Pacific Trade Agreement, the relevant conventional tariff rates will be further reduced.

Preferential tariff rate

  • Except for Equatorial Guinea, preferential tax rates will continue to be applied to other lesser developed countries that have established diplomatic relations with China and completed exchange procedures.
  • From January 1, 2020, Equatorial Guinea will cease to enjoy the preferential treatment of zero tariffs.

Interpretation of Domestic Subheading

According to CTC Public Notice [2019] No. 51, from 1 January 2020, the interpretation of 24 domestic subheadings have been adjusted, which are distributed in 9 chapters of the China Tariff Schedule.

Implications

It is recommended that businesses conduct an analysis of the import/export tax amount changes arising from China's tariff rate adjustments as early as possible to clarify the impact on finance and supply chain.

Businesses are also advised to compare the HS codes of goods exporting to China with the China domestic subheading adjustments to ensure the accuracy of the declared HS codes and compliance with customs declarations.

———————————————
ENDNOTE

1 Chapters involved in the modification of subheading notes: Chapters 7, 20, 22, 28, 54, 55, 84, 85, 86.

———————————————
CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young Ernst & Young (China) Advisory Limited, Shanghai

  • Bryan Tang
    bryan.tang@cn.ey.com

Ernst & Young Ernst & Young (China) Advisory Limited, Beijing

  • Tina GY Zhang
    tina-gy.zhang@cn.ey.com

Ernst & Young Ernst & Young (China) Advisory Limited, Guangzhou

  • Kelvin Ma
    kelvin.ma@cn.ey.com

———————————————
ATTACHMENT

PDF version of this Tax Alert

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2024, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement