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          Detailed content of the Offshore Duty-free Policy of Hainan

          ( chinadaily.com.cn )

          Updated: 2011-05-27

          1. Content

          The offshore duty-free policy refers to the preferential tax policy, the Pilot Implementation Plan of the Offshore Duty-Free Shopping Policy on Hainan Island, developed for tourists leaving the island by plane (Tourists leaving the country are not included here.) to enjoy import duty-free shopping within limits on number of visits, value, categories and quantities of goods. Customers must pay for the goods at a designated duty-free store and take delivery of the goods at the pick-up counters within the airport’s quarantine zone.

          1.1 Shopping procedure

          Eligible tourists who buy offshore duty-free commodities should follow four steps. First, tourists must buy the import duty-free goods in a duty-free store under the supervision of Customs. Second, offshore tourists must pay for their purchase inside the duty-free store. Third, the tourist must wait for the duty-free store to deliver the purchased goods to airport pick-up counters according to the tourist's departure time and destination. Fourth, tourists must take possession of the goods at the pick-up counters within the airport’s quarantine zone.

          1.2 Application groups

          The offshore duty-free policy applies to domestic and foreign visitors including residents of Hainan province, who are at least 18 years old, and boarding flights to leave Hainan Island but not China.

          1.3 Applicable conditions

          Offshore tourists must meet these three conditions to enjoy duty-free shopping:

          (a) Tourists must show proper identification, including a purchased travel ticket and eligible ID cards, domestic passengers holding an identity card (or passengers from Hong Kong, Macao, and Taiwan holding required travel documents), or an overseas passenger holding a valid passport.

          (b) The eligible tourist must abide by limits on values, quantities, number of visits and categories when shopping in the designated duty-free store.

          (c) The eligible tourist must take delivery of the duty-free goods by providing a valid identity card, shipping documents and boarding pass at the designated place of delivery within the quarantine zone of the airport, and the goods must be carried by the passengers themselves when leaving the island by air.

          1.4 Offshore duty-free stores

          The offshore duty-free stores refer to those with implementation of the offshore duty-free policy and the franchise. Offshore duty-free stores were?set up?separately in Haikou and Sanya to test the policy. The Sanya store was additionally given the offshore duty-free policy on the basis of the outbound city duty-free store originally approved by the government, which will be opened to test the policy since this notice starts from the date of implementation. Haikou's duty-free store is going to be launched for the trial after its business entity, site selection and related supporting facilities are confirmed and approved by the relevant authorities.

          1.5 Category?of duty-free products

          During the trial period, duty-free products cover the?following categories: jewelry, crafts, watches, perfume, cosmetics, glasses (including sunglasses), silk towels, ties, woolens, cotton textiles, clothing accessories, shoes and caps, leather belts, bags, small leather items, candy and sweets, and sports supplies. Twenty types of prohibited products are not exempt from duties.

          1.6 Category of duty free taxes

          The category of taxes stipulated by the offshore duty-free policy involves Customs duties, import value-added duties, and consumption duties.

          1.7 Number of times for the offshore duty-free shopping

          Visitors who do not reside on the island can enjoy the offshore duty-free shopping policy twice per person per year. Residents of Hainan can enjoy the policy only one time per person a year. It is regarded as one duty-free shopping trip if visitors leave the island after a purchase. The status of Hainan residents will be identified by the ID card.

          1.8 Amount and quantity of duty-free shopping

          Offshore visitors (including visitors residing on the island) are tentatively allowed to spend less than RMB 5,000 yuan on each duty-free shopping visit per person. The annex to The Pilot Announcement for the Duty-Free Shopping Policy on Hainan Island provides the amount and range of the duty-free goods. In addition, each tourist is allowed to buy one article worth more than RMB 5,000 yuan per unit if he or she has paid import duties for imported goods in full payment.

          1.9 Date of implementation of the pilot policy

          The policy begins on April 20, 2011.

          2. Significance of the offshore duty-free policy

          It has been more than two years since our province formally applied to the State Council for the special duty-free shopping policy, and this policy was adopted with the full support of local and national government entities.

          2.1 In December 2009, Opinions for Promoting the Construction of Internationalized Tourism Island in Hainan ([2009] 44) released by the State Council required a feasibility study. In December 2010, the State Council approved the Pilot Implementation Plan of the Offshore Duty-Free Shopping Policy on Hainan Island, and today it is formally on trial as the first step to a permanent or revised policy. Supporters hope this policy spurs further development of Hainan's tourism industry and modern service industry, and accelerates the pace of construction of Hainan as an international tourism island.

          2.2 The offshore duty-free policy is a major trial in line with the reform and opening-up of China.

          2.3 The offshore duty-free policy will be gradually revised as lessons are learned during the course of the trial. The offshore duty-free policy is not an international practice because there is no international experience for us to learn from. Our province will be striving to accumulate experience, perfect the measures, making an accurate analysis of policy effects, and revise our policy proposals accordingly.

          2.4 The offshore duty-free will promote Hainan’s all-round economic and social development. This policy is a major initiative for Hainan to implement the scientific concept of development, and speed up the transformation of economic development patterns, also a substantive step for Hainan as part of its effort to become an international tourism island.

          3. Implementation of policy

          Since the State Council approved the Pilot Implementation Plan of the Offshore Duty-Free Shopping Policy on Hainan Island, with the vigorous support of the relevant departments of the State Council, our province has made full preparations for the policy implementation. Supporting policies related to the supervision customs have been made. A supervision information system has been tested and installed in place. After a recent simulation is completed, we will apply to the relevant international institution for acceptance, making sure of the high efficient information management on the offshore duty-free shoppers since April 20.

          Construction of the duty-free stores is under way. The Sanya duty-free store is fully equipped for the pilot operation, and commodities are being provided. The Haikou duty-free store is being readied for construction. The provincial government has applied to the State Council for the establishment of a provincial-level state-owned duty free company which enjoys the franchise of duty-free goods. Other supporting facilities, including the airport delivery point and the Customs supervision venue, are nearing completion.

          Sanya to construct tax-free shopping district

          One amazing new measure is to establish a large-scale "tax-free shopping district" in Sanya, by taking advantage of the favorable tax-free policies in urban areas.

          China's 1st tropical sea ranch begins construction

          Construction of China's first tropical sea ranch began on Tuesday in Sanya, a coastal resort city in southern Hainan province, said an official with the Sanya Ocean and Fisheries bureau.

          Sanya set to welcome the Volvo Ocean Race 2011-12

          Sanya, the southernmost city on the golden coast of Hainan province, will host the Volvo Ocean Race 2011-12.

          Copyright 2011 China Daily All Rights Reserved
          Official Website of Hainnan Duty Free
          Sponsored by Hainan Provincial Government
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