THIS CIRCULAR REGULATES THE LOCAL CONTENT RATES FOR PRODUCTS AND PARTS IN THE ELECTROMECHANICAL AND ELECTRONICS INDUSTRY AND THE METHOD TO DETERMINE THE IMPORT DUTY RATE BASED ON LOCAL CONTENT RATES. BUSINESSES MUST SUBMIT ANNUAL SETTLEMENT REPORTS TO DETERMINE THE ACTUAL LOCAL CONTENT RATE AND APPLY THE CORRESPONDING DUTY RATE.
适用范围
BUSINESSES PRODUCING AND ASSEMBLING PRODUCTS AND PARTS IN THE ELECTROMECHANICAL AND ELECTRONICS INDUSTRY.
要点
- BUSINESSES MUST RECALCULATE THE ACTUAL LOCAL CONTENT RATE AT THE END OF EACH FINANCIAL YEAR TO SERVE AS THE BASIS FOR THE IMPORT DUTY RATE FOR THE FOLLOWING YEAR.
- CUSTOMS AUTHORITIES WILL CALCULATE AND COLLECT THE IMPORT DUTY BASED ON THE ACTUAL LOCAL CONTENT RATE REPORTED IN THE ANNUAL SETTLEMENT REPORT.
- BUSINESSES MUST REGISTER WITH THE CUSTOMS AUTHORITIES TO APPLY THE IMPORT DUTY RATE BASED ON THE LOCAL CONTENT RATE.
- CUSTOMS AUTHORITIES WILL VERIFY AND DETERMINE THE ACTUAL LOCAL CONTENT RATE THROUGH THE REVIEW OF THE ANNUAL SETTLEMENT REPORT SUBMITTED BY THE BUSINESS.
- BUSINESSES THAT DO NOT MEET THE REQUIREMENTS WILL ONLY BE APPLIED THE IMPORT DUTY RATE CORRESPONDING TO THE LOCAL CONTENT RATE RECORDED BY THE MINISTRY OF INDUSTRY BEFORE JANUARY 1, 2001.
🌐 本文件的社会影响
- POSITIVE IMPACT: HELPS BUSINESSES REDUCE IMPORT DUTY COSTS THROUGH INCREASING LOCAL CONTENT RATES.
- NEGATIVE IMPACT: BURDEN OF REPORTING AND AUDITING WORK FOR BUSINESSES.
- WHAT SHOULD MY COMPANY DO TO APPLY THE IMPORT DUTY RATE BASED ON THE LOCAL CONTENT RATE?
❓ 常见问题
YOU NEED TO SUBMIT A REGISTRATION APPLICATION TO THE CUSTOMS AUTHORITIES INCLUDING THE TECHNICAL CONDITION AND PRODUCTION CAPABILITY CERTIFICATION FROM THE MINISTRY OF INDUSTRY, AND THE LIST AND QUANTITIES OF SEMI-FINISHED PRODUCTS, COMPONENTS, SUB-ASSEMBLIES, AND PARTS MAKING UP A PRODUCT OR PART.
IF THE ACTUAL LOCAL CONTENT RATE IS HIGHER THAN THE REGISTERED RATE, WHAT TAX REFUNDS WILL THE BUSINESS RECEIVE?
THE BUSINESS WILL RECEIVE A REFUND OF THE IMPORT DUTY ALREADY PAID IF THE ACTUAL LOCAL CONTENT RATE IS HIGHER THAN THE REGISTERED RATE.
IF THE ACTUAL LOCAL CONTENT RATE IS LOWER THAN THE REGISTERED RATE, WHAT ACTIONS MUST THE BUSINESS TAKE?
THE BUSINESS WILL HAVE TO PAY THE ADDITIONAL DUTY ACCORDING TO THE RATE CORRESPONDING TO THE ACTUAL LOCAL CONTENT RATE.
DOES MY COMPANY NEED TO SUBMIT ANNUAL SETTLEMENT REPORTS?
YES, YOUR COMPANY MUST SUMMARIZE AND SUBMIT ANNUAL SETTLEMENT REPORTS ON IMPORTS AND PRODUCTION ASSEMBLY SITUATIONS OF THE PREVIOUS YEAR WITHIN 60 DAYS AFTER THE END OF THE FINANCIAL YEAR.
IF THE BUSINESS DOES NOT MEET THE REQUIREMENTS, HOW WILL THE IMPORT DUTY RATE BE APPLIED?
THE BUSINESS WILL ONLY BE APPLIED THE IMPORT DUTY RATE CORRESPONDING TO THE LOCAL CONTENT RATE RECORDED BY THE MINISTRY OF INDUSTRY BEFORE JANUARY 1, 2001, BUT NOT LATER THAN MARCH 1, 2001.
The enterprise shall only apply the import tax rate corresponding to the domestic content ratio recognized by the Ministry of Industry before January 1, 2001, but not later than March 1, 2001.
全文
JOINT CIRCULAR
176/1998/TTLT-BTC-BCN-TCHQ dated December 25, 1998 of
(%): Localization rate of a product or component.
Z: The CIF value of semi-finished products, details, sub-assemblies, parts directly imported by the enterprise.
4.2. Determining the localization rate for the following year:
At the end of the fiscal year, the enterprise must re-evaluate the actual achieved localization rate to determine the import tax rate based on the product's or component's localization rate for the next fiscal year.
The localization rate for the product or component for the next fiscal year is determined according to the actual localization rate of the preceding year. In this context, criterion (Z) is the selling price of the product, as guided in Point 4.1; criterion (I) is the actual CIF import value.
Within sixty days (60 days) from the end of the fiscal year, the enterprise must submit a final report on the implementation of localization to the Ministry of Industry, customs authority where import procedures are handled, and the tax authority where the enterprise registers for tax payment. In the final report (certified by an auditing agency), the actual localization rate of the registered products and components must be clearly specified. The enterprise's management is legally responsible for the truthfulness and accuracy of the data in the final report.
The customs authority where the enterprise handles import procedures, based on the actual achieved localization rate reported in the final report, will calculate and collect the corresponding import tax according to the actual localization rate. This import tax rate will be applied starting from the next fiscal year. If within sixty days (60 days) from the end of the fiscal year, the customs authority has collected a different import tax than the rate the enterprise enjoyed, then the customs authority will recalculate and collect the import tax according to the correct rate corresponding to the actual localization rate reported in the final report.
For types (models) of products or components that enterprises have registered for localization but only produce and assemble within one year (without implementing localization in the following year), upon completion of production and assembly of these products and components (no later than thirty days), enterprises must submit a final report in accordance with the guidelines and pay the import tax according to the actual achieved localization rate. If the actual localization rate is higher than the registered localization rate, the enterprise will be refunded the paid import tax; if the recalculated localization rate is lower than the registered localization rate with the Ministry of Industry, the enterprise will have to pay additional tax according to the rate corresponding to the actual localization rate.
4.3. For cases where enterprises import parts and components solely for assembly without production or using domestically produced parts and components, or using domestic products, parts, and components but only as secondary items (packaging, promotional materials, user manuals), they can only apply the lowest import tax rate based on the localization rate.
III. Replacing Point 6 (priority index) with a new Point 6, as follows:
6. Encouragement Index:
In cases where enterprises produce and assemble products and components that require encouragement, the import tax rate based on the localization rate will be reduced as follows:
Tk = Ts x (1 - k)
Where:
Tk: Encouragement coefficient (k < 0.5 - the tax reduction does not exceed 50% compared to the tax payable). The encouragement coefficient is uniformly applied to each type of product or component listed in the investment encouragement catalog. The application period of the encouragement coefficient shall not exceed five years and decreases annually.
The catalog of products and components requiring investment encouragement; the application period of the encouragement coefficient; and the encouragement coefficient for products and components shall be announced by the Ministry of Industry after obtaining the consensus of the Ministry of Finance and the Ministry of Science, Technology, and Environment.
IV. Replacing Point 7 (implementation organization) with a new Point 7, as follows:
7. Implementation:
7.1. Registration dossier:
Enterprises producing and assembling products and components must submit to the customs authority (where import procedures are handled) a registration dossier to apply for import tax rates based on the localization rate for the year, including:
7.1.1. A confirmation certificate from the Ministry of Industry regarding technical conditions, production technological capacity, and the localization rate of the enterprise's products and components (for products and components registered for localization in the first year).
7.1.2. Catalog and quantity standards of semi-finished products, details, sub-assemblies, and parts constituting a product or component.
Among which, there is a list of semi-finished products, details, sub-assemblies, and parts imported along with their CIF import value, and a list of semi-finished products, details, sub-assemblies, and parts produced domestically (for details, sub-assemblies, parts, and components produced by the enterprise itself or purchased from domestic producers and assemblers, the supplier's name must be clearly stated).
If an enterprise registers to apply the import tax rate for raw materials based on the localization rate, it must provide a catalog and quantity standards of imported raw materials for producing those products and components.
7.1.3. A registration form applying the value-added tax deduction method, endorsed by the tax authority where the enterprise registers for tax payment.
7.1.4. The registration dossier is only provided once to the customs authority. Based on the localization rate confirmed by the Ministry of Industry, the customs authority will calculate and collect the import tax according to the localization rate within one year (based on the fiscal year), even if the enterprise changes its registered supply source.
If the customs authority discovers that the enterprise imports but does not meet the conditions stipulated in Point 3 of Section I of this Circular, it will issue a Record and not apply the import tax rate based on the localization rate.
7.2. Monitoring and finalizing imported goods:
7.2.1. Monitoring imported goods: When importing, enterprises are responsible for declaring in full the quantities of each type of raw materials, semi-finished products, components, sub-assemblies, parts, and their import prices, while maintaining records of imported goods in accordance with the regulations of the customs authority.
The General Department of Customs guides local customs offices in monitoring imported goods to facilitate enterprises and prevent abuse and evasion of import taxes.
7.2.2. Settlement of imported goods: Within sixty days from the end of the fiscal year, enterprises must compile a settlement report on the situation of imports; production and assembly of the previous year. Specifically:
A table calculating the actual rate of localization achieved in the year, determined according to the guidelines set out in Section II of this Circular.
Quantities of semi-finished products, components, sub-assemblies, parts, and spare parts imported; quantities of components, sub-assemblies, parts, and spare parts produced domestically; quantities used in production and assembly; quantities of products and spare parts produced; quantities carried over to the next year; quantities sold or not used for production and assembly purposes.
Production and business licenses consistent with the registered business activities (photocopies) of enterprises selling components, sub-assemblies, parts, and spare parts produced domestically for enterprises registered to implement localization of products and spare parts.
The figures in the settlement report must be confirmed by an independent auditing agency.
Based on the enterprise's settlement report, the customs office where the enterprise has registered to apply import tax rates based on the localization rate will calculate and collect import taxes according to the actual localization rate achieved by the enterprise in accordance with the provisions of this Circular. In case of doubt, the local tax authority shall take the lead in coordinating with the local customs office to inspect the importation, production, domestic procurement sources, determine the actual localization rate of the enterprise, and report the inspection results (minutes) to the Ministry of Finance, the Ministry of Industry, and the General Department of Customs. The customs office will recalculate the import tax rate corresponding to the localization rate determined in the inspection minutes. If the enterprise engages in fraudulent behavior or tax evasion, it will be punished according to the law.
V. Other Provisions:
This Circular takes effect from January 1, 2001. The provisions stipulated in Circular No. 176/1998/TTLT-BTC-BCN-TCHQ dated December 25, 1998, issued jointly by the Ministry of Finance, the Ministry of Industry, and the General Department of Customs, which do not conflict with the provisions of this Circular, remain in force.
For enterprises that have registered to implement localization of product and spare part production and have been recognized by the Ministry of Industry before January 1, 2001, if they do not need to re-register, they may continue to implement according to the provisions of this Circular. Enterprises that do not meet the conditions specified in Point 3, Section I of this Circular can only apply import tax rates corresponding to the localization rate recognized by the Ministry of Industry before January 1, 2000, but no later than March 1, 2001. For these cases, based on the enterprise's report, the customs office will settle accounts for the enterprise. If the enterprise is found to be non-compliant, tax arrears must be collected according to the prescribed import tariff rates and current regulations, while compiling and reflecting any unreasonable points to the General Department of Customs for consideration and resolution by the General Department of Customs, the Ministry of Finance, and the Ministry of Industry.
During implementation, if there are difficulties, organizations and individuals are advised to promptly reflect them to the relevant ministries for appropriate handling./.
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