Circular of the Customs Tariff Commission under the State Council on the Adjustment Plan for the Provisional Import and Export Tariff Rates and Other Tariff Rates in 2019 (CTC [2018] No. 65) (Mainland China)

Karl Zhang

The Customs Tariff Commission under the State Council recently issued a circular on its adjustment plan for the 2019 provisional import and export tariff rates (i.e., the 2019 Adjustment Plan for Provisional Import and Export Tariff Rates; the “Adjustment Plan”). The adjusted tariff rates will go into effect on January 1, 2019.

According to the Adjustment Plan, the tariffs adjusted this time mainly involve the following types: the Most-favored-nation (MFN) tariff rate, the tariff quota rate, the agreement rate, the preferential tariff rate, and the export tariff rate.

For the MFN rate, starting from January 1, 2019, 706 items will be assessed with the provisional import tariff rates; and beginning from July 1, 2019, the provisional tariff rate for the import of 14 information technology products will be eliminated, and the applicable scope of the provisional import tariff rate will be reduced by one item. The fourth tax reduction will be implemented from July 1, 2019 pursuant to the MFN rate for information technology products listed in the Amendment to the Schedule of Tariff Concessions for the Accession of the People’s Republic of China to the World Trade Organization.

As far as the tariff quota rate is concerned, tariff quota administration will continue to be implemented for wheat and other commodities for a total of eight categories, with the tariff rate remaining unchanged. In particular, the 1% provisional import tariff rate will continue to apply as the quota tariff rate for three types of fertilizers in urea, compound fertilizers and ammonium hydrogen phosphate.  Other than that, a sliding duty based on a specific amount of cotton imported beyond the quota will continue to apply with appropriate adjustment.

As far as the agreement rate is concerned, in addition to the continued implementation of the tariff reduction plan based on the agreement rate approved by the State Council, starting from January 1, 2019, the agreement rate will be further reduced for countries with trade agreements with China such as New Zealand, Peru, Costa Rica, Switzerland, Iceland, South Korea, Australia Georgia and Asia Pacific Trade Agreement countries. For products originating from Hong Kong and Macau, zero tariffs will be fully implemented in accordance with the Agreement on the Establishment of Closer Economic Partnership Arrangement.  Meanwhile, the Adjustment Plan states that when the MFN tariff rate is lower than or equal to the agreement rate, the provisions of the relevant agreements will apply.

In terms of the preferential tax rate, the preferential tax rate under the Asia-Pacific Trade Agreement will be further reduced pursuant to the same agreement.

For the export tariff rate, starting from January 1, 2019, the export tariff or provisional export tariff rate will either be applied or continue to apply to 108 exported commodities with the tariff rate unchanged, while the provisional export tariff rate for 94 export items are eliminated.

For specific products covered by the above tariff rates, they may be looked up in the provisional tariff rate table for imported goods, the MFN tariff table for certain information technology products, the tariff rate table for tariff quote products, the tariff rate table for exported commodities, and the tariff rate table for imported goods whose tariffs are to be further reduced.