The processing trade in which raw materials are imported tax-free from overseas into mainland China by using the processing trade handbook has greatly contributed to the development of the Chinese manufacturing industry. However, illegal acts involving such raw materials as imported tax-free to the black market have flourished. To address the foregoing situation, the Chinese government introduced a system of bank surety accounts that require payment in advance of a guarantee equivalent to the customs duty and value added tax involved in the processing trade for which taxes are exempted in principle. However, not every company is required to pay the guarantee. The necessity of payment and the amount will be determined depending on the rank of the processing company and the goods imported.
We will explain the system of bank surety accounts.
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System of bank surety accounts |
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