Notice of the PRC Customs on the Regulatory Measures for the Hainan Free Trade Port and the Tax Policies for Circulation within the Island

Issued by:	General Administration of Customs, Ministry of Finance, State Taxation Administration
Issue No.:	Announcements No. 158 and 159 of 2025, Finance and Taxation [2025] No. 12 and 13
Issue Date:	July 24, 2025; July 18, 2025
Effective Date:	July 24, 2025; December 18, 2025
Links:	https://db.hainan.gov.cn/xxgk/xzgfxwj/t20250724_3902324.html https://db.hainan.gov.cn/xxgk/xzgfxwj/gjygwj/20250724_7.html https://fgk.chinatax.gov.cn/zcfgk/c102416/c5241947/content.html https://fgk.chinatax.gov.cn/zcfgk/c102416/c5241950/content.html

With effect from 18 December 2025, the Hainan Free Trade Port (“HN FTP”) will officially launch the custom-sealed operations. The entire island of Hainan will become a special customs-supervised zone operating under the core principle of “open front line, controlled second line, free movement within the island” (the “front line” being between HN FTP and locations outside China’s customs territory; the “second line” being between HN FTP and the rest of mainland China).

A concise outline of the new post-closure policies is set out below.

The scope of “beneficiary entities” eligible for “zero-tariff” treatment—i.e., exemption from import customs duty, import VAT, and import consumption tax—will be significantly expanded. In addition to independent legal-person enterprises and public institutions already registered in HN FTP, private non-enterprise entities in the science-and-technology and education sectors are newly included.
For goods entering via the “first line”, the zero-tariff regime will switch from a positive-list approach to a negative-list approach. Beneficiary entities may import any goods not listed in the “Catalogue of Import-Taxed Commodities” free of customs duty, import VAT, and consumption tax. Consequently, the number of tariff lines qualifying for zero-tariff treatment will expand from the current 1,900 to more than 6,600.
"Zero tariff" imported commodities and their processed products may circulate freely among beneficiary entities with no need to make up for import taxes.
Goods produced by encouraged-industry enterprises that contain imported inputs and achieve a processing value-added ratio of 30 % or more in the HN FTP may enter the mainland market exempt from import duties, while import VAT and consumption tax are levied in accordance with the applicable regulations.
Zero-tariff goods that fall under any of the “Four Categories of Measures” (tariff-quota administration, trade-remedy measures, suspension of tariff concessions, or additional/retaliatory tariffs) remain subject to the relevant national rules when imported via the “first line”.