Item

Export Processing Zone (EPZ)

State-Level Development Zone

Difference of Cost

IN EPZ

OUTSIDE EPZ

A. Property (building materials for construction of building and equipment etc.)

1.

Import

Exemption of import duty & VAT

Import duty & VAT

- import duty & VAT

+ import duty & VAT

2.

Domestic purchase

VAT can be refunded to Supplier

VAT cannot be refunded.

- VAT (13%)

+ VAT (17%)

B. Production Equipment

1.

Import

All companies registered in EPZ enjoy exemption of import duty & VAT

Only the company approved as “Chinese Encouraged Industry” enjoys exemption of import duty & VAT.

Same

Same

2.

Domestic

VAT can be refunded to Supplier.

Only supplying to the company approved as “Chinese Encouraged Industry”, the company can get VAT refunded.

- VAT

- VAT (only for “encouraged industry” project)

C. Parts & Components for Equipment

1.

Imported

Exemption of import duty & VAT

Import duty & VAT

- import duty & VAT

+ import duty & VAT

2.

Domestic

VAT can be refunded to Supplier

Supplier cannot get VAT refunded.

- VAT

+ VAT

D. Raw Materials

1.

Import

All import materials are bonded.

Import materials used for export processing are bonded;

Import materials used for domestic sales shall be levied import duty & VAT.

All Bonded

Parts for domestic sales will be levied import duty & VAT.

2.

Domestic

Supplier can get VAT refunded.

Domestic materials used for export products can get VAT refunded. It is the company who finish export process enjoys VAT being refunded.

- VAT

- VAT  (only and when for export  products)

E. Consumable materials

1.

Import

Bonded

Import duty & VAT will be levied

- import duty & VAT

+ import duty & VAT

2.

Domestic

VAT can be refunded to Supplier.

VAT cannot be refunded.

- VAT

+ VAT

F. Consumption fees on water, electricity and gas

VAT refunded

No VAT refunded.

- VAT ( 13%)

+ VAT

G. Domestic Sales of Finished Products

Import duty & VAT will be levied based on finished products，and the import duty & VAT shall be paid by purchaser.

17% VAT is levied on value added parts, and import duty & VAT still will be levied on import materials. All shall be paid by company itself.

+ import duty & VAT on products finished in EPZ

+ import duty & VAT on import raw materials;

+ 17% VAT

H. Land

No requirements for 30% green area

30% of total land must be green area

J. Customs Service

24 hours services; and separate customs office servicing for companies in EPZ

Regular work time; one customs office servicing for all companies in zone

simplified

normal