Import tax policy on goods imported by

domestic enterprises for processing and

delivered to EPE for sub-processing

On September 4, 2020, General Department of Customs (GDC) issued Official Letter No. 5864/TCHQ-TXNK guiding on import tax policy of goods imported by domestic  enterprises for processing and delivered to EPE for sub-processing.

According to GDC, in case a domestic enterprise signs a processing contract with a

foreign trader and hires an EPE to sub-process, the import tax policy for processed

products imported by domestic enterprises from an EPE shall apply as follows:

In case the EPE does not use raw materials and components imported from abroad

(it means that all raw materials and components constituting the processed product

are provided by the domestic enterprise to the EPE), when that processed product 

imported into the domestic market by domestic enterprises is exempt from import

tax;

In case the EPE uses raw materials and components imported from abroad, the

domestic enterprise must pay import tax on the processed products when they are

imported into the domestic market. The dutiable value is the processing fee and

the value of the raw materials and components which imported from abroad by the EPE used for processing.

Official Letter No. 5864/TCHQ-TXNK does not provide guidance on the refund paid

import tax when domestic enterprises export products after processing.