CIRCULAR OF THE STATE COUNCIL CONCERNING TAXATION ON IMPORTED COMMODITIES FOR REAL PROPERTY CONSTRUCTION

(April 23, 1995)

    In order to strictly control the scale of investment in fixed assets,
adjust investment structure, guide the investment orientation, and promote
the coordinated development of real property construction and the national
economy, the present Circular is hereby issued concerning imposition of
customs duties, value-added tax and consumption tax on importation
(hereinafter referred to as import-related taxes ) of different kinds of
commodities and equipment for real property construction.

    1. Those imported commodities and equipment required for the productive
projects and projects involving new and high technology, education, public
health, scientific research or infrastructure facilities with foreign
investment or in some special areas (special economic zones, bonded areas,
the national economic and technology development areas, frontier economic
cooperation zones, Shanghai Pudong New Zone and the state tourist and holiday
zones) and for construction of productive factory buildings or storage
facilities to be sold, assigned or leased, which enjoy preferential treatment
of reduction of or exemption from customs duties and import-related taxes
under present stipulations shall continue to enjoy that preferential
treatment under the strict supervision and administration by the customs.

    2. All those commodities and equipment imported by any area, enterprise,
organization or individual in any trading form for construction (including
reconstruction and extension) of guesthouses, hotels, office buildings,
villas, apartment buildings, residential buildings, places for business and
shopping, places and shops of recreation and service trades, shops and houses
of catering trade, or for any other real property projects, whether to be
sold, assigned, leased or for self-utilization, or for mixed utilization with
productive factory buildings, shall be imposed of customs duties and import-
related taxes by the statutory tax rates.

    3. This Circular shall enter into force on May 1, 1995. Those imported
building commodities and equipment for foreign investment projects the
contracts of which have been approved before under the statutory procedure
for examination and approval, or for the construction projects of domestic
enterprises which have been before approved to bring into line with the state
or local plan of capital construction projects to start under the statutory
procedure for examination and approval, which may enjoy reduction of or
exemption from customs duties and import-related taxes according to the
original stipulations, shall continue to enjoy that preferential treatment
within the scope of the total investment approved.

    In case of discrepancy between this Circular and any previous
stipulations, this Circular shall prevail.