Enterprises should adhere to the operation philosophy of "credibility and law compliance", strictly observing state laws and regulations in respect of import and export, and practice the under-mentioned points. These are the requirements of the Customs for implementing effective supervision and the foundation for enterprises to survive, develop and compete with domestic and foreign counterparts.
I. Declare truthfully
When applying to the Customs for going through clearance formalities, enterprises shall complete true and accurate contents relevant to the goods in the formats as required (the Import/Export Declaration Form), and achieve consistency in two aspects: first, consistency between documents, i.e., the contents of the declaration form conform to the relevant documents including contracts, permits and licenses, invoices, packing lists, bills of lading and waybills; second, the consistency between the documents and the goods, i.e., the contents declared in the declaration form conform to the conditions of the actual imported/exported goods. In particular, the name, quantity, specification, price, country of origin, mode of trade, consumer country, and trading country of the goods must be true and correct. E-manifest data must be true, standard, and accurate, and in full conformity to the manifest in paper. The Customs will verify and inspect the declared contents and goods in accordance with state laws and regulations.
II. Pay taxes in accordance with the law
Tax revenue is the fundamental source and guaranty of state financial revenue. The state levies taxes on its citizens and legal persons in accordance with the law. The citizens and legal persons, on the other hand, are obliged to pay dutiable taxes pursuant to the law, faithfully provide the tax authorities with the information relevant to tax payment, and actively assist the tax authorities in tax examination in accordance with the law.
The state empowers the Customs the right to levy duties and import/export-related taxes on imported and exported goods and inbound and outbound articles, and the consignee and the consignor of imported and exported goods and their agents are obliged to pay duties and import/export-related taxes. Where tax-payment obligors take various means, in violation of relevant laws and administrative regulations, to evade dutiable taxes, which constitute acts of smuggling or violation of customs supervision provisions, they will be punished in accordance with the provisions of the Criminal Law of the People's Republic of China, the Customs Law of the People's Republic of China, and other relevant laws and administrative regulations.
It is worth noting here:
- Determination of the duty-paid value. The duty-paid value of imported goods is examined and determined by the Customs based on the transaction price of such goods, and shall include the freight and relevant costs and the insurance fees for the goods before unloading at the entry place within the People's Republic of China. The duty-paid value of exported goods includes the price of the goods, the freight and relevant costs and insurance fees for the goods before loading at the exit place within the People's Republic ofChina; however, the amount of export duties included therein shall be deducted.
The transaction price of imported goods refers to the price actually paid or payable by the buyer for the goods, including all the payments directly or indirectly paid by the buyer to the seller or a third party performing the seller's obligations.
In addition, the following costs or value shall be included for determination of the duty-paid value of imported goods:
A. The following costs borne by the buyer: 1. commissions and brokerage charges except the commission for purchase of goods; 2. the costs for containers indispensible to the goods; and 3. expenses on packaging materials and labor service;
B. The royalties directly or indirectly paid by the buyer which are relevant to the goods and form one condition for the seller to sell the goods to the People's republic of China; and
C. Income obtained directly or indirectly by the seller from resale, disposal or use of the goods imported by the buyer.
The Measures of the Customs of the People's Republic of China for Assessing and Determining the Duty-paid Value of Imported and Exported Goods stipulate that in case of failure to determine the duty-paid value based on the transaction price of imported goods, the Customs are entitled to propose challenges, and may assess and determine the duty-paid value in the methods of transaction price of identical goods, transaction price of similar goods, deductive value and price calculation, as well as other reasonable methods in succession. Meanwhile, the Customs may consult with the consignee/consignor of the imported/exported goods on the price.
- Types of taxes and fees levied by the Customs. The Customs levy taxes and fees on imported goods, which include: duties, import-related value-added tax and consumption tax; anti-dumping duty levied on listed anti-dumping goods; overdue fine levied on the goods with outstanding tax; supervision fees levied as per the provisions on the goods enjoying tax exemption or reduction and the bonded goods; delayed declaration fee charged on imported goods for which the declaration formalities are not completed with the Customs within the specified time limit; and the deposit levied on the temporarily import/export goods or the goods subject to deposit as set out in relevant provisions.
- Supplementary levy and retroactive levy of customs taxes and fees. After release of the imported/exported goods, where the Customs find that the taxes have not been levied in full or there is omission in respect of taxes, they shall levy the outstanding part of the taxes on the tax payment obligor within one year from the day of tax payment or goods release. Where the shortfall or omission related to taxes is caused by the tax payment obligor's breach of the provisions, the Customs may retroactively levy the outstanding taxes within three years. For the taxes over-levied, the Customs shall return to the taxpayer immediately upon discovery; and the taxpayer may request the Customs to refund the over-levied taxed within one year from the date of tax payment.
-Texpayment period and mandatory measures. The taxpayer for imported/exported goods shall pay the taxes within fifteen days from the day when the Customs complete and issue the tax pay-in warrant. Where it fails to pay the taxes within the specified period according to the provisions, it shall pay an overdue fine of 1‰ of the outstanding tax amount per day. Where the taxpayer fails to perform its obligation of tax payment three months after the specified period, the Customs will enforce the following mandatory measures: the Customs notify its deposit bank or other financial institution in writing of withholding the taxes from its deposit account; or sell the dutiable goods in accordance with the law and pay taxes with the proceeds therefrom; or detain and sell in accordance with the law the goods or other property with value equal to the dutiable taxes, and pay taxes with the proceeds therefrom.
III. Use and dispose the goods under customs supervision in accordance with the law
The goods under customs supervision refer to all the inbound and outbound goods for which the Customs formalities are not completed.
- Enterprises are required to observe the following rules for use and disposal of the goods under customs supervision:
A. Accept the Customs inspection. When the Customs inspect the goods, the party concerned shall be present at site to move the goods, unpack and re-seal the packages of the goods. Where the Customs deem necessary, they can conduct inspection, re-inspection, or sample drawing on the goods at their own discretion.
B. Without approval from the Customs, no entity or individual may load and unload, move, deliver, draw, unpack, re-pack, exchange, hypothecate, pledge, transfer, or change the marks and signs on the goods under customs supervision.
C. The manager of the warehouse or premise for storage of the good under customs supervision shall complete the formalities for receipt, storage and delivery according the Customs supervision regulations; the storage of the goods under customs supervision in a place outside the Customs supervision zone shall subject to the Customs approval and supervision.
D. For the disposal of various bonded goods, specific goods enjoying tax exemption or deduction and temporarily imported/exported goods, including changing the specific area, enterprise, and purposes for the use of the goods, and exchange, domestic sale, transfer, leasing, mortgage, and pledge, enterprises shall apply to the Customs in advance for examination and approval.
- Enterprises shall strengthen the management on the goods during the period of customs supervision. Focus shall be placed on the goods with long periods of custom supervision, such as the imported goods enjoying tax exemption or deduction (including machines and equipment, vehicles, and building materials), bonded materials imported for processing trade, finished products under processing, temporarily imported goods, and other goods for which the duties and import-related taxes are not paid or fully paid.
During the supervision period, enterprises shall use and keep the goods under customs supervision in strict accordance with the relevant provisions. Without approval from the Customs and completion of the relevant formalities, enterprises may not make disposal decisions arbitrarily. Upon expiration of the supervision period, enterprises shall timely apply to the Customs for removing the supervision over the goods enjoying tax exemption or deduction or for verification and cancellation of bonded goods, in order to facilitate the verification and completion of relevant formalities by the Customs.
IV. Establish and improve the internal control mechanism of the enterprise
Enterprises shall combine their own management requirements with the corresponding administrative regulations of the Customs, and establish and improve their internal control mechanism, which includes:
- System of job responsibility. Strengthen the management on the posts of the managerial personnel, persons in charge of declaration or the heads of the import and export departments, and declarants of enterprises, specify their responsibilities and duties, and formulate complete operation formalities concerning import and export business, work standards and administrative provisions for declarants.
- Sound management systems for import and export business, including management systems concerning customs declaration, foreign exchange write-off, export tax rebates, exclusive rights for import and export such as approval and quota, and financial management system, with clear-cut division of import and export business and complete provisions on operation procedures.
- Management systems and regulations concerning seals, contracts, bills, receipt and payment of documents, files, and warehousing. Enterprises designate specific personnel to keep the special seals, handbooks, declaration forms, manifests, materials of transfer for further processing, and other relevant import and export materials, and have specific systems and formalities for custody, hand-over and filing. Enterprises shall keep materials such as accounting books and documents within the time limit and in compliance with the requirements as set out in the Accounting Law and the Accounting System for Business Enterprise, so as to enhance the accounting supervision.
- Internal coordination and contact mechanisms of enterprises, to ensure the orderly linkage between import and export business as well as the proper hand-over and custody of relevant import and export materials including handbooks, declaration forms and information on transfer for further processing, and to avoid the loss of important business documents or failure to provide relevant books or materials, so as to form an integrative system with coordinated and uniform management on import and export business.
V. Accept customs inspection voluntarily
In accordance with the requirements of the Customs Law, the Regulations of the People's Republic of China on Customs Inspections and the Implementing Measures of the Regulations of the People's Republic of China on Customs Inspections, the Customs may conduct inspections on enterprises and entities directly relevant to import and export activities.
The subjects under customs inspection are enterprises and entities directly related to the import and export activities, specifically including: 1. enterprises and entities engaging in foreign trade; 2. enterprises engaging in foreign processing trade; 3. enterprises conducting bonded business; 4. enterprises and entities using or operating goods enjoying tax exemption or deduction; 5. enterprises engaging in customs declaration business; and 6. other enterprises and entities engaging in business directly related to the import and export activities as prescribed by the General Administration of Customs.
- Contents of customs inspection. During the inspection period, the Customs can inspect and verify the accounting books and documents, declaration documents, and other relevant materials (hereinafter referred to collectively as such relevant materials as books and documents), as well as the relevant imported and exported goods of the relevant enterprises, in order to ensure the authenticity and legality of the enterprises' import and export activities.
- Period of customs inspection
A. For imported goods under normal trade, within 3 years from the day of release of the goods by the Customs;
B. For bonded goods, within the supervisions period specified by the Customs, or within 3 years from the day of release for re-export, or within 3 years from the day of release for import after being changed into normal trade upon approval;
C. For imported goods enjoying tax exemption or deduction, within the Customs supervision period and the subsequent 3 years; and
D. For other imported/exported goods, within 3 years from the day of completion of relevant customs formalities.