Home > Services

Import & Export License

Importing into China

Introduction

You want to import goods into China, but you don’t know what regulations you have to comply with? This is exactly why the experts of TianDot Shipping have created this article. Indeed, you will find reliable information about Chinese customs clearance, import licenses and about the new customs regulations as well as import restrictions. If you have any further questions, don’t hesitate to ask to one of our experts.

1/ General information about the Chinese tax system

If you want to import goods into China, it is essential that you should understand in details how does the Chinese tax system work before clinching any contract. First of all, importing goods into China can generate three types of taxes:

Import duties
Import value-added tax
Consumption tax

*Of course, it depends on the nature of the imported goods and on whether they are subject to specific restrictions or not.

1.1 Import Duties

The duty rates when importing into China consist in many different rates such as the most-favoured-nation duty rates, conventional duty rates, special preferential duty rates, general duty rates, tariff rate quota duty rates and temporary duty rates.

More specifically, when it comes to the most-favoured-nation duty rates, we can identify the general tariff rates and the preferential tariff rates:

If you want to import goods from a country that does not take part in the most-favoured-nation trade agreements, then, the general tariff rates for importation go from 0%, 8% up to 270% with more than 20 different rates.
If you want to import goods from a country that has effectively concluded most-favoured-nation trade agreements, then the preferential tariff rates go from 0%, 1 % up to 121.6% with more than 50 different rates.

1.2 Import value-added tax

This tax concerns almost every business transaction in China and it has to be paid monthly.

There are three categories of VAT rates, according to the nature of the goods you want to import:

The standard VAT rate of 16 % is imposed on imports into China. Its value is highly related to the customs value and the cost of insurance and freight (CIF). This rate concerns sale of goods, processing, repair and replacement services as well as physical property leasing or impartation.
A lower rate of 10 % applies to transportation tools sales, postal service, basic telecommunications, architecture, real estate lease and sales, land use right transfer, sales or import of agriculture products, tap water, natural gas.
A special VAT rate of 6 % is applied to goods sold by certain small-scale taxpayers.

Info TianDot : This is a regulation’s shift. Indeed, since May 1, taxpayers originally subject to VAT rates of 17 % and 11 % are subject to rates of 16 % and 10 %, respectively. When it comes to taxpayers who are concerned by the 6 % VAT rate, there are not affected.

How to get the status of a small-scale taxpayer?

Those already registered as general VAT taxpayers have the option to transfer to small-scale VAT taxpayer status until December 31, 2018, if they meet the criteria.

If you want to be considered as a small-scale VAT taxpayer, you will have to meet a business’ annual revenue criteria. Previously, there were three separate industry-specific categories to determine small-scale VAT taxpayer status. With the new regulation, the three categories have been unified into a single one.

1.3 Consumption Tax-added tax

Whether as an individual or as an organization, as long as you import taxable consumer goods, you are subject to the consumption tax is applied.

More specifically, the consumption tax is levied on the following four categories of products:

Consumption tax is filed and has to be paid monthly. As you may have seen, tax rates vary considerably according to the type of product. Moreover, it is calculated ad valorem or based on the volume of sales.

Info TianDot : When it comes to who is caring the responsibility to pay the import taxes, it usually depends on how the sales contract is clinched between the buyer and the seller.

2/ New regulations – Changes to China Import Regulations

Regulations that control the import of goods and their subsequent sale on China’s domestic market are very complex and it keeps on evolving. Indeed, over the last years, the General Administration of Customs China implemented a series of new regulations that directly have an impact on companies that import taxable goods in China.

The latest revisions, that were effective on June 1, 2018, affected the manifest rules of imports and exports in China. The adjusted rules include the following:

Manifest submissions must be made 24 hours prior to loading. This includes all vessels going to or coming from any mainland ports in China.
The cargo description must be complete and accurate.
Full contact details of the shipper and consignee are mandatory, as well as the enterprise codes.

TianDot Advice: This will result in some changes to the way we, and our agents, fill in and issue bills of lading for both air and ocean freight shipments. Of course, if you have any further questions, don’t hesitate to ask to one of our experts.Fore more information, you can contact one of our TianDot experts. Please fill our form in 1 min and get an answer within 48h !

TianDot Warning: Beware! China has a series of labelling and packaging requirements in place that are particularly important for consumer goods. If the goods do not meet these requirements, they will be refused entry to China.

3/ Imports classification

The China’s Ministry of Commerce has classified goods in three categories: the permitted goods, the restricted goods and the prohibited goods. Certain goods are banned from being imported, while products that are subject to restrictions require quotas or licenses.

The latest revisions, that were effective on June 1, 2018, affected the manifest rules of imports and exports in China. The adjusted rules include the following:

Manifest submissions must be made 24 hours prior to loading. This includes all vessels going to or coming from any mainland ports in China.
The cargo description must be complete and accurate.
Full contact details of the shipper and consignee are mandatory, as well as the enterprise codes.

3.1 The permitted goods

This category is automatically licensed, that you need a license to ship goods out of China, but this latter will be issued automatically on application. The automatic license is valid for six months, and you may have up to six batches of goods on it.

3.2 The restricted goods & prohibited goods

The restricted goods can be exported, but either license approval or annual quotas allows their control and their regulation. This type of goods can be exported but an approval has to be issued for each shipment, knowing that its validity time is one year.

The exportation of prohibited products is for its part, absolutely banned. Various authorities including MOFCOM define the list of prohibited goods.

Please find the list of prohibited and restricted goods herein below:

Weapons, simulated weapons, ammunition and explosives
Forged currency or securities
Printed matter, films, photos, movies, audiotapes, videotapes, CDs, DVDs, computer storage devices and other things that could do harm to China’s politics, economy, culture and morality
Poison and addictive drugs
Food, drugs or other things that could do harm to humans and animals, and are infectious or from epidemic areas
Animal and animal products:

All living animals (excluding dogs and cats) and their sperm, zygotes, embryos and other genetic things
Uncooked or cooked meat (including internal organs); marine animal products
Milk of animal and its products, silkworm chrysalis, silkworm eggs, animal blood and its products, products of aquatic animals
Eggs and its products those are not heat-treated
Fur, mane, bones, horns, oil and fat, fleshes and the corresponding products
Edible bird’s nests (excluding canned bird’s nests)
Transgenic biomaterials

Plants and plant products:

Fresh fruit and vegetables
Tobacco leaves (excluding cut tobacco)
Seeds, sprouts, nursery stock and other fertilizable plants
Organic cultivation medium
Soil

Other quarantine types:

Animal bodies, samples or specimens, and offal from animals
Transgenic biomaterial
Pathogens of animals and plants, injurious insects and organisms
Human blood and corresponding products

TianDot Tips: If you need specific information about the goods you want to import, don’t hesitate to contact one of our customs experts. Otherwise, you can find further information directly on the official website: General Administration of Customs People’s Republic of China

TianDot Advice: If you unintentionally bring any of these items, make sure to give it to the inspection and quarantine officials or throw into the disposal box arranged by the authority.

Import licences

There are two types of import licenses: the automatic licenses and the non-automatic licenses. The first type concerns the permitted goods and the second one affects both the restricted and the prohibited goods.

Automatic License

Most products are permitted goods and only need an automatic import license. In this case, the licence is issued automatically to all applicants and is only used to track imports more accurately.

Once you have managed to get an automatic import license, you will have no restrictions when it comes to the amount of import licenses you can receive, you will just have to apply fort it each time you want to import another type of items.

Each automatic import license can be used for a time of 6 months, and usually for imports of one batch.

Info TianDot : In the fact, one license can sometimes be used for several batches. Moreover, you will also be able to receive several import licenses, each time you apply for an automatic import license.

Non-automatic License

Non-automatic import licences are used to control the importation of restricted and prohibited goods but also to implement tariff rate quotas. Indeed, because restricted goods are subject to import regulations due to quotas implemented by the government, a non-automatic license is required before trying to import.

What information is required to apply for an import license?

Moreover, the information that is usually required for an application is the following one:

Importer’s company name and company number
Consignee in China
Automatic import license number and expiry date
Terms of trade and of foreign exchange
Place of clearance
Country/region of exportation and of origin
Use of goods
Description of goods and product code of goods
Specification, unit, quantity, unit price
Supplementary details
Issuing authority stamp

Info TianDot: If you need an import license regarding the goods you want to import, you can apply directly on the MOFCOM website.

Conclusion

In short, you must identify well the nature of the goods you want to import and its category (permitted, restricted or prohibited). Then, you have to establish what kind of taxes it suggests that there suggest and for what type of import license you have to apply. If you have any doubt, please contact our Customs Clearance experts.

FAQ

What is the process of import and export?

Export procedure(s) or import procedure(s) are directly connected with documentation. Because anyone who wishes to export needs to provide or fill the documents required for export. Every procedure or process is related to some kinds of documents.

How does import work?

An import is any product or service transported into one country from a different country according to trade law regulations. … The importing and exporting business creates the foundation for global trade. When importing (bringing) goods into a country, a nation’s customs department will typically be involved.

What is import order?

Import Orders are orders placed for goods that are meant to be imported. For example, when shipping your company’s goods you may have domestic and export orders. The domestic orders are those orders from customer who are located in your domestic market (same country your shipping location is in).

What is import shipment?

International trade and shipping consists of two parts: importing and exporting. Importing is the acquisition of goods from abroad, and exporting is the sale and distribution of goods to other countries. These transactions tend to be on a large scale.

What is import compliance?

Import/Export Compliance Sets the Tone. A trade compliance program lays the groundwork for how you need to behave and ensures you are meeting your legal obligations with Customs and other government agencies.

What is an import license?

An import license is a document issued by a national government authorizing the importation of certain goods into its territory. … Governments may put certain restrictions on what is imported as well as the amount of imported goods and services.

Services