Special customs supervision zones
“Special customs supervision zones” are closely monitored by China Customs—particularly with respect to the movement of goods and materials that cross borders between the zones and the inland customs territory, and between the zones and overseas locations.
In general, tax and customs duties are treated similarly across the various zones; however, in some instances (for example, if a free trade zone is involved), companies may encounter different results—particularly with respect to the timing of export VAT refunds and in determining the customs duty-base of products imported for domestic consumption.
Because the October 2012 guidance was written in the form of a general, overarching policy framework, it is expected that China Customs and other appropriate authorities will follow up with implementation guidance measures. In any event, with the policy framework, it appears that there is a shift as to how SCSZs will function.
Treatment of repair items
An “internal memo” from China Customs provides explanatory details and suggests an integrated approach for the treatment of repair items in SCSZ.
Companies—especially those in the repair business—need to be aware of certain potential opportunities and may want to review their current operations, products, and location in order to identify opportunities to streamline, innovate and/or relocate.
Read a February 2013 report [PDF 340 KB] prepared by the KPMG member firm in China: China State Council publishes new policy framework on special customs supervision zones