11 Hainan FTP tax incentives implemented

On April 13th, a press conference on "Welcoming the Eighth Hainan Provincial Congress of the Chinese Communist Party - special session on implementing the policies of the Free Trade Port and high-quality development" revealed that, with the support of the Ministry of Finance and other state ministries and commissions, 11 Hainan Free Trade Port tax incentives have now been implemented.

Photo by NEW HAINAN APP

In 2020, six preferential tax policies for the Hainan Free Trade Port were announced, including an island departure duty-free shopping policy for outbound travelers, a preferential income tax policy for enterprises and individuals, a "zero tariff" policy for raw and auxiliary materials, a "zero tariff" policy for vehicles and yachts, and a VAT policy for international transportation ships.

In 2021, Hainan released 5 more tax policies, including a tax rebate policy for the Yangpu Port of Departure, a "zero tariff" policy for production equipment for internal use, a policy allowing domestic and foreign trade ships to refill with bonded oil, a policy on the local production of fuel oil, preferential tax policies for imported exhibits at the China International Consumer Products Expo,and a policy on refueling with bonded fuel for departing or arriving flights.

Meanwhile, the government continues to evaluate and adjust these policies as needed. For example, the doubling of the list of goods included in the "zero tariff" policy for raw and auxiliary materials, adding roller coasters and other amusement equipment to the list of production equipment for internal use "zero tariff" policy, and the expansion of the policy to cover not only enterprises but also institutions.

The implementation of the preferential tax policies of the FTP is a strong driver of development for the Hainan FTP.

In 2021, the province's newly added market entities maintained rapid growth momentum. There are 1.4 times more newly added taxable enterprises this year than there were in 2020, and the number of new foreign taxable enterprises is 1.9 times that of 2020, with more than 80% of new taxable enterprises from outside the province, 1.7 times the percentage in 2020. At the same time, the Free Trade Port talent pooling effect is growing stronger. In 2021 the Hainan Free Trade Port welcomed 199,000 talented newcomers, an increase of 63%.

A wide variety of tax incentives play a key role in different areas, promoting the transformation of Hainan's economic development model and improving the province’s quality of development. Annual investment in high-tech industries in the province grew by 36.6% in 2021, 26.4 percentage points higher than the growth rate for all investments combined. Innovation is becoming more and more influential in driving Hainan’s industry growth.

The Hainan Island departure duty-free and Consumer Expo policies have become highlights of Hainan's tourism spending. The 2021 island departure duty-free policy continued to maintain rapid growth, with the amount of departure duty-free spending totaling 50.49 billion CNY, the number of items sold increasing to 53,492,500, and the number of shoppers to 9,676,600, up 83%, 71%, and 73% year-on-year, respectively.

The preferential tax policy for exhibits proved to be a great boon for the China International Consumer Products Expo. Tax-free sales at the First Consumer Expo totaled 2.075 million CNY, with 25 enterprises benefiting and 462,000 CNY exempted from tax.

Special policies have greatly enhanced the attractiveness of Yangpu Port, including the port of departure tax rebate policy, the policy allowing domestic and foreign trade ships to refill with bonded oil, and the international transport ship tax rebate policy. By the end of February 2022, a total of 412 shipping industry-related market entities were registered in Yangpu, and there were 204 ships newly registered at the port.

Source: HIMC