Thursday, August 23, 2012

China's biomaterial industry to benefit from new tax policy

More than 95% enterprises will greatly enjoy the convenient policy by extending declaration period, enlarging the export rebate and tax exemption scope and simplifing procedures of export rebate declaration, according to CCM International’s August issue of Biomaterials China News.

Declaration period is greatly extended from 90 days to 470 days at most. According to the former related regulation, enterprises must apply for export rebate in 90 days from customs clearance, or related enterprises won't gain the returned tax. Now, the new policy regulates that the declaration period is from the day of customs clearance next month to April 30 of next year, so the declaration period can be 150 days at least and 470 days at most.

Ms. Yang, Manager of Xiamen Guozheng Tax Office, said that due to debt chain, goods receiver's delay in issuing the tax invoice and many other factors, but many enterprises can not collect adequate materials to finish declaration and fail to gain export rebate. At last, the export rebate on exported goods can not be gained. What's more, these exported goods aren't used to sell in domestic market and extra taxes on them have to be paid. And now, even though enterprises miss the declaration period, these exported goods won't be used to sell in domestic market which will be suitable for tax exemption. In this context, extending declaration period can relieve enterprises' burden.

Apart from the extending declaration period, the export rebate and tax exemption scope of export goods are also enlarged.

Former regulation has set four categories of outsourcing products that can be considered as the enterprise self-produced products entitled to enjoy the export rebate, but restrict limits are stipulated, such as outsourcing product's name, performance, model that must be consistent with the enterprise self-produced products. Outsourcing products must use the enterprises' registered trademarks or be provided by foreign enterprises that can be used by domestic enterprises, etc. Now, based on the four categories, new policy relaxes the restrictions. For those who have operated continuously for two years or more, have gained the qualification of VAT general taxpayer, have the tax credit rating of level A, and have sales value for last year of over USD78.5 million (RMB500 million), their outsourcing products just need to have a correlation to the enterprise self-produced products can be considered as the enterprise self-produced products to apply for export rebate.

Some tax experts think this stipulation is an encouragement for large exporters, which can help them increase their market share in the international market. Currently, many domestic biomaterial enterprises are facing the problem of capacity shortage, such as Wuhan Huali Environmental Technology Co., Ltd. and Zhejiang Hisun Pharmaceutical Co., Ltd. If they receive an order that out of their capacity, they will try to outsource products to hold the customers. Before the new policy, the outsourcing products can't be applied for export rebate, but now they can.

Besides, the procedures of export rebate declaration are greatly simplified. For example, enterprises don't need to offer verification sheet for customs clearance, and administrative permission projects are sharply decreased. The new policy has canceled a rule for small or newly established enterprises that small or newly enterprises don't need to wait for 12 months to gain tax rebate. Mr. Zhu, Customs Declarant of Shandong Fuwin New Material Co., Ltd., one of the main PBS producers, thinks these new policies can help increase biomaterial enterprises' competitiveness, as they can have more cash and less loan, especially for biomaterial industry in which the investment is great."

The publication of these new tax policies is under the depressed situation of foreign trade. In Feb. 2012, Ministry of Finance of the People's Republic of China and State Administration of Taxation have sent out research team to Shenzhen City, Xiamen City, Hainan Province, etc., to investigate the situation of foreign trade and economic development and listen to the opinion of export enterprises. And then, Wang Qishan, Vice Premier of State Council of People's Republic of China, said, "Strive to make the annual growth rate of foreign trade reach 10%." While, in H1 2012, China's total foreign trade value is USD1,839.84 billion, up 8% year on year. Thanks to the depressed macroeconomic conditions, the Chinese government may publish more stimulus policies, and China's biomaterial industry will benefit more.

Source: Biomaterials China News 1208

Main content of Biomaterials China News 1208:
China's biological plastic industry still in rapid development though macro economy cold in 2012
China's biomaterial industry to benefit from new tax policy
A direction set for China's biomass fiber industry
Shenzhen BrightChina to expand its PLA capacity to 50,000t/a within 5 years
Jiangsu Xinming to raise fund for Lyocell fiber
Lanhai Technology develops algae fiber
Price of castor oil still down since Aug. 2011
Price of natural rubber is not optimistic
Domestic potato price to be stable in 2012
China's PLA export rises but import decreases in June 2012
China's import volume of dry cassava witnesses decrease in June 2012
… …

Biomaterials China News, with 12 to 14 topics in one issue, published on the 8th every month, will bring you the latest information on the latest market dynamics, company dynamics, new biomaterials products, new biomaterials technology development, new legislations and policies and raw material supply dynamics that are shaping the market.

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