Notice on the Application of Tax Refund Policy for Domestic Purchased Materials Entering Export Processing Zones and Other Special Customs Supervision Zones All provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning, the State Administration of Taxation, the Guangdong Branch of the Customs, the special offices in Tianjin and Shanghai, the customs directly under the Central Government, and the Finance Bureau of Xinjiang Production and Construction Corps: With the approval of the State Council, the following tax refund policies are applicable to domestically purchased materials entering export processing zones and other special customs supervision zones: 1. The above-mentioned goods are not allowed to leave the country for export. If they are not used up in the area, they will be supervised by the customs and withdrawn from the area. However, if the infrastructure materials entering the area from abroad are transported outside the domestic area, the customs declaration and tax payment formalities shall be handled in accordance with the relevant provisions of the customs on the administration of special customs supervision areas. This policy applies to all areas under special customs supervision. Second, raw materials such as finished leather, steel, aluminum and non-ferrous metal materials (excluding steel billets, steel ingots, electrolytic aluminum, electrolytic copper and other metal primary processing products) purchased by production enterprises in the region for the production of export products in China have been refunded at the statutory rate of value-added tax when entering the region. See the annex for the specific commodity list. Three, the production enterprises in the region have purchased the raw materials specified in Article 2 above in China without substantial processing, and may not resell the non-production enterprises in the region (such as warehousing, logistics, trade and other enterprises), directly leave the country or leave the region in a bonded manner. Violation of this provision shall be dealt with according to the relevant provisions of tax fraud and tax evasion. The above-mentioned raw materials enjoying tax refund are sold to China without substantial processing, and various import link taxes are levied according to regulations. The substantive processing standard shall be implemented according to the "Regulations of the People's Republic of China on the Origin of Import and Export Goods" (the State Council Decree No.416). 4. Non-production enterprises (such as bonded logistics, warehousing, trade and other enterprises) in the zone do not enjoy this policy if they purchase the raw materials specified in Article 2 above in China. 5. The above two, three and four measures are only applicable to export processing zones with bonded processing functions, bonded port areas, comprehensive bonded zones, Zhuhai-Macao cross-border industrial zones (Zhuhai Park) and China-Kazakhstan Horgos International Border Cooperation Center (Chinese supporting areas). Specific supervision measures shall be formulated separately by the General Administration of Customs in conjunction with the State Administration of Taxation and other relevant departments. This notice will be implemented on February 15, 2008.