China Customs: Duty & Exchange Rate Determination Explained

I.Determination of Tax Rates

According to the Regulations on the Completion of Goods Declaration Forms of the Customs of the Peoples Republic of China: The Measures for the Administration of Taxation on Goods (hereinafter referred to as the "Measures") stipulate that the principles for applying tax rates to imported and exported goods are crucial.The determination of tax rates is based on the following aspects:

Determination Time of Applicable Tax Rates

The time point for applying the tax rate is the date when the customs accepts the goods declaration.If it is an advanced declaration approved by the customs,the date of entry declaration of the means of transport carrying the goods is applicable.

Ways to Query Tax Rates

Tax rates can be queried through the "Customs Import and Export Tariff of the People’s Republic of China" or the "Internet + Customs" platform.

Application of Tax Rates under Special Circumstances

Including the rules for applying tax rates in cases such as advanced declaration,transit,centralized declaration,overdue non - declaration,and tax recovery.

II.Determination of Exchange Rates

Applicable Time Point of Exchange Rates

Same as the tax rate,the exchange rate of import and export goods is also determined according to the date of applying the tax rate.

Determination Method of Levy Exchange Rates

The levy exchange rate used by the customs each month is based on the benchmark exchange rate of foreign currencies against the RMB announced by the Peoples Bank of China on the third Wednesday of the previous month.

Handling of Exchange Rate Changes

In case of significant fluctuations,the General Administration of Customs may stipulate the levy exchange rate separately and announce it to the public.

III.Impact on Enterprises and Response Strategies

Timely Update Tax Rate and Exchange Rate Information

Enterprises need to pay close attention to changes in tax rates and exchange rates to ensure the accuracy of information used in customs declarations.

Precautions under Special Circumstances

Under special circumstances such as advanced declaration and transit,enterprises need to pay special attention to the rules for applying tax rates and exchange rates to avoid unnecessary financial risks.

Management of Tax Re - collection and Refund

Enterprises should pay attention to the customs notices of tax re - collection and refund to ensure timely response to relevant customs requirements.

Re - declaration after Cancellation of Customs Declaration Form

If the customs declaration form is cancelled and re - declared due to special circumstances,enterprises need to pay attention to possible changes in tax rates and exchange rates.

Systematic Tax Management

Enterprises should establish a systematic tax management system to cope with the impact of changes in tax rates and exchange rates.

The determination of tax rates and exchange rates is of great significance to import and export enterprises,related to the cost and profit of enterprises.Enterprises need to pay close attention to the relevant regulations of the Measures for the Administration of Tax Collection on Import and Export Goods of the Customs of the Peoples Republic of China and adjust their customs declaration strategies in a timely manner to ensure compliance and financial stability.