There are restrictions on the types of outlying islands duty-free products. Currently, a total of 45 categories have been approved, including mobile phones, cosmetics, watches, jewelry, shoes and hats, clothing and accessories.
After Hainan’s outlying islands’ duty-free policy was upgraded, the outlying island’s duty-free shops sold hot during the "11" holiday.
In order to standardize the tax management of duty-free shops and strengthen supervision, the State Administration of Taxation has issued new regulations.
On October 10, the State Administration of Taxation announced the “Administrative Measures for the Exemption of Value-Added Tax and Consumption Tax for the Sale of Duty-Free Products on Off-Islands in Hainan’s Outlying Islands” (hereinafter referred to as the “Administrative Measures”), requiring the 4 currently approved duty-free shops in Hainan to sell off-island Duty-free goods must be declared and paid for value-added tax and consumption tax, and the sales of outlying island duty-free goods and taxable items shall be calculated separately, otherwise they shall not be exempted.
The "Administrative Measures" came into effect on November 1.
In order to promote the construction of the Hainan Free Trade Port, the state has further relaxed the Hainan outlying islands' duty-free policy. The types of duty-free commodities have been expanded to 45 categories. The number of purchases of most commodities is unlimited, and the annual duty-free shopping quota for tourists is increased to 100,000 yuan.
There are currently four duty-free shops in Hainan, namely Haikou Meilan Airport Duty Free Shop, Haikou Riyue Square Duty Free Shop, Qionghai Boao Duty Free Shop, and Sanya Haitang Bay Duty Free Shop.
This preferential policy has stimulated the shopping enthusiasm of tourists, and some hot-sale counters of Hainan duty-free shops even lined up in long queues during the "October" holiday.
According to Haikou Customs statistics, from October 1 to 8, Haikou Customs supervised Hainan’s outlying islands with a total of 1.04 billion yuan of duty-free shopping, 146,800 passengers, and 998.9 thousand pieces, respectively, an increase of 148.7%, 43.9%, and 97.2% year-on-year.
The relevant person in charge of the State Administration of Taxation said that with the increase in the number of duty-free shops in Hainan's outlying islands, as well as the enrichment and increase in the types and quantities of duty-free goods on the outlying islands, higher requirements have been put forward for the tax authorities to implement the tax management of duty-free shops.
In order to promote the effect of Hainan’s outlying island tax exemption policy, promote the construction of Hainan’s international consumption center, further strengthen and improve the value-added tax and consumption tax management of Hainan outlying island duty-free shops, and improve the tax management system of duty-free shops, the Ministry of Commerce and Finance and the State Administration of Taxation have formulated the " Management Measures.
A highlight of the "Administrative Measures" is to clarify the tax management requirements for value-added tax and consumption tax for goods sold in duty-free shops on outlying islands.
Among them, Article 5 requires that outlying island duty-free shops selling non-outlying island duty-free goods shall declare and pay value-added tax and consumption tax to the competent taxation authority in accordance with current regulations.
Article 6 stipulates that if an outlying island duty-free shop concurrently operates items subject to value-added tax and consumption tax, the sales of outlying island duty-free commodities and taxable items shall be accounted for separately; if they are not accounted separately, they shall not be exempted.
According to the previous "Announcement of the Ministry of Finance and the General Administration of Customs and Taxation on the Tax-Free Shopping Policy for Hainan Islands Passengers", there are restrictions on the types of outlying islands’ duty-free commodities. Currently, a total of 45 categories have been approved, including mobile phones, cosmetics, watches, jewelry, shoes and hats, and clothing. Clothing and so on.
In addition, in order to strengthen supervision, the above-mentioned "Administrative Measures" require companies operating outlying island duty-free commodities to obtain relevant information about the sale of outlying island duty-free commodities, information on outlying island passengers who purchase outlying island duty-free commodities, and other information required by tax authorities through the tax authorities' regulations. The reporting format or transmission method shall be complete, accurate and provided to the tax authorities in real time.
As Hainan’s outlying islands’ tax exemption policies are more preferential, there is objectively room for arbitrage. Some smuggling gangs use the outlying island’s tax exemption policies to purchase tax-free goods from other people’s outlying islands and then sell them to the market for illegal gains.
On September 24, the General Administration of Customs announced that up to now, the Customs has imposed a penalty of “no purchase of duty-free goods on outlying islands within three years” on 219 passengers who violated regulations on Hainan’s outlying islands’ duty-free shopping through the supervision system, and at the same time 364 attempted to exempt duty-free Passengers who bring goods out of the quarantine area are intercepted and discouraged.
It is reported that of the 219 illegal passengers, 28 were to carry duty-free goods out of the island in violation of regulations, and 191 were to sell duty-free goods for profit.
Author: Chen Yi-Journal