Starting from April 1st, the offshore trade stamp duty preferential policy will be officially piloted in the Shanghai Pilot Free Trade Zone and Lingang New Area. This is the first tax preferential policy issued and implemented in China for offshore business
In order to further cultivate new momentum for offshore trade, the Shanghai Free Trade Zone Bonded Zone promotes the functional upgrading of the “Offshore Connect” platform.
At the theme event of “High Quality Development of Offshore Trade” held on April 29th, the “Offshore Connect” platform upgraded its functions and launched the offshore trade business auxiliary module (tax end) to assist in the joint supervision and risk response closed-loop management of offshore trade exemption from stamp duty, providing auxiliary support for data exchange between regulatory departments.
He Ping, Director of the Taxation Bureau of the Shanghai Pudong New Area Bonded Zone of the State Administration of Taxation, stated that through this auxiliary module, tax departments can share relevant data on the trade flow, fund flow, and documents of each offshore trade, which can reduce disturbance to enterprises and help them enjoy the preferential policies of stamp duty with lower compliance costs and more convenience.
Starting from April 1st, the offshore trade stamp duty preferential policy will be officially piloted in the Shanghai Pilot Free Trade Zone and Lingang New Area. This is the first tax preferential policy issued and implemented in China for offshore business.
According to regulations, from April 1, 2024 to March 31, 2025, sales contracts signed for offshore transfer transactions of enterprises registered in the China (Shanghai) Pilot Free Trade Zone and Lingang New Area are exempt from stamp duty.
The implementation of this preferential policy will be conducive to promoting institutional innovation in bonded areas that is in line with international high standard economic and trade rules, effectively reducing the operating costs of enterprises conducting offshore trade, and comprehensively improving the international competitiveness of bonded areas in developing offshore trade.
Sony Electronics Finance and Accounting Department Director Hu Yan stated that the company’s current offshore trade mainly involves purchasing from Southeast Asia and then shipping to North America, Europe and other places. Last year, Sony Electronics completed nearly $300 million in offshore resale transactions in Shanghai. Hu Yan stated that Sony Electronics has introduced a stamp duty exemption policy in several procurement centers, which will help gradually attract business orders from other regions to China.
Offshore trade is a special trade model in which goods are transported overseas and funds are settled domestically. It can promote the flow of trade funds and information to headquarters enterprises, and has a strong driving effect on the development of trade, finance, and supporting services in the headquarters location. The scale of offshore business also represents a region’s international market competitiveness and global market resource allocation ability.
As an important trade hub in Shanghai, the bonded area of the Shanghai Pilot Free Trade Zone is a pioneer and important gathering area for the development of offshore resale business in China. Samsung Semiconductor, Sony Electronics, Thermo Fisher Scientific, and others have grown into benchmark enterprises in offshore trade. In 2023, there were over 300 offshore trading enterprises in the bonded area, and the total amount of payments and receipts for offshore trading business conducted by enterprises in the bonded area in commercial banks across the country accounted for about 80% of the total amount in Shanghai. This has attracted multinational enterprises to transfer their offshore business from overseas entities to Shanghai entities, helping enterprises explore new models of offshore business and enhancing the international resource allocation capacity of the Shanghai Free Trade Zone.
In order to solve the authenticity verification problem caused by the separation of offshore trade order flow, goods logistics, and fund flow, the first auxiliary information platform in China that integrates overseas data to support trade authenticity verification, the “Offshore Pass” platform, was officially launched in October 2021. This platform integrates, analyzes, and cross compares logistics data such as loading and unloading at overseas ports and customs declaration to solve the problem of authenticity verification.
At present, the platform has integrated customs declaration information from 19 countries, covering over 180 shipping companies, over 21000 container ports and terminals worldwide, and 50% of global air cargo information, providing strong support for Shanghai to enhance its global resource allocation capabilities.
Next, the bonded area has stated that it will play a good role in the “offshore trade stamp duty preferential policy”, better leverage the advantages of the “Offshore Connect” platform, help bonded area enterprises explore new models of offshore business, cultivate new profit growth points, comprehensively improve the international competitiveness of offshore trade development in the bonded area, further enhance the scale of Shanghai’s offshore trade business, and release new momentum for foreign trade development.