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Comparison between policies and supervision modes of free trade zones, export processing areas, and outside processing

 

Within export processing areas

Free trade zones

Outside processing

Functions

Only processing

international trade, modern logistics, processing and manufacturing, and displaying and exhibitions

 

Processing is allowed to be done by enterprises outside special zones

Tax policies

Almost the same as those for free trade zones

Almost the same as those for development areas and export processing areas of state level

Tax exemption for processing trade enterprises' importing non-evaluated equipment

Domestic tax policies

VAT and consumption tax exemption over the processed and exported goods in the areas and taxable labour

Almost the same as

those for development areas and export processing areas of state level

 

Policies on goods sold on the domestic market

For goods sold on the domestic market outside the export processing areas by enterprises in the export processing areas, taxes shall be levied on the basis of finished products. 

For goods sold on the domestic market outside the export processing areas by enterprises in the free trade zones,taxes shall be levied on the basis of the proportion of foreign parts. Only when the goods sold domestically are fully made up of foreign parts can the tax rates for finished products be applicable.

For all goods sold on the domestic market by outside enterprises, the taxes shall be levied basing on the proportion of the imported materials of the goods.

Management modes

Fully-closed and checkpoint management shall be applied for the enterprises in export processing enterprises. Closed circuit television systems shall be installed at the fences and checkpoints by the customs, and a 24-hour working system shall be adopted.

Areas within fences at the free trade zones shall be under 24-hour supervision of the customs.

Open management shall be applied for the decentralized processing trade enterprises outside the customs districts, and an 8-hour working system shall be adopted.

Examination and approval prodedures

No bank deposit account system is required, and only  the approval from the administrative committee is needed for the filing of the contracts. All examination and approval procedures are boiled down to one step.

No bank deposit account system is required, and only  the approval from the administrative committee is needed for the filing of the contracts.

A bank deposit account system is required.The filing of contracts shall go through 14 steps from economic and trade commission, tax authority,and the bank.

Supervision modes

Registration manuals are cancelled, and e-ledger management shall be applied, where the enterprises shall declare electronic data through EDI, and after the examination of the customs, it shall be recorded automatically into the e-ledger system.

Electronic networking supervision mode.

"Registration manual" management shall be applied, which includes several steps like the printing of contracts, pasting anti-counterfeiting labels and issuance of "registration manuals",and so on.

Customs clearance modes

New customs clearance mode of "one declaration, one examination and one inspection: shall be applied.

A unique customs clearance mode of "centralized  customs clearance, and goods to be shipped in different batches" shall be applied.

Customs clearance in 3rd locations or customs transit transportation shall be adopted, and the procedures are complicated.

Supervision measures

Making full use of modern hi-tech,enterprise-customs in charge-port customs computer networking management.

With the highest degree of modernization.

Mainly manual supervision.There isn't much use of computers in the management.The customs personnel shall need to carry out mid-term on-site investigations to the enterprises.

Deep processing transit

 

Deep processing transit shall be allowed between different export processing areas, export processing areas and free trade zones, enterprises in export processing areas and enterprises from the outside.

Deep processing transit shall be allowed between  export processing areas, export processing areas and free trade zones, enterprises in export processing areas and enterprises from the outside.And "one-day circulation" can be realized through the bonded logistics parks in the free trade zones.

Deep processing transit shall be allowed between different outside processing trade enterprises,and between outside processing trade enterprises and enterprises in free trade zones.

Contract modification

Procedures for contract modification are simple,which can be gone through directly.

Even simpler procedures for contract modification.

Procedures for contract modification are quite complicated, which need to be gone through with different authorities according to the contract recording procedures.

Management of cancellation after verification

There is no computerized rolling cancellation after verification, which is carried out every half-year.

Optional settlement of foreign exchange and cancellation after verification shall be applied.

Manual contract-to-contract cancellation after verification, which is complicated and inefficient,the cancellation after verification of each contract shall take 60 days.

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