China's General Administration of Customs Announces Tax Policies for Cargo Import/Export for Hainan Free Trade Port 'Closed Operation', Detailed Regulations for 'Zero Tariff' Measures

China's General Administration of Customs announced on August 25 tax policies for the import and export of goods on the "first line" (boundary between Hainan Free Trade Port and foreign countries/regions) and "second line" (boundary between Hainan Free Trade Port and mainland China), as well as circulation within the trade port. This establishes a specific tax system toward the start of "closed operation" across Hainan Island scheduled for December 18, 2025. The main policy contents are as follows: (1) Goods imported via the "first line" that are not listed in the "Hainan Free Trade Port Import Tariff Taxable Goods List" will be subject to "zero tariff". When "zero tariff" goods and their processed products are exported via the "first line", export tariffs will be collected on goods subject to export tariff taxation. (2) When "zero tariff" goods and their processed products are imported via the "second line", import tariffs and import value-added tax/consumption tax must be declared and paid. (3) When "zero tariff" goods and their processed products circulate between organizations eligible for "zero tariff" treatment within Hainan Free Trade Port, related taxes are exempted. Special management measures apply to four types of tariff measure target goods (8 items under WTO tariff quota management including wheat, corn, rice, and chemical fertilizers; goods subject to China's AD, CVD, and safeguard measures; goods subject to tariff concession suspension and additional tariff measures; and goods subject to retaliatory tariffs). This policy materializes the special customs supervision and management area system of Hainan Free Trade Port based on "first line opening, second line management, and island freedom".