I. Diamond Tax Policy Before the Adjustment
1. Raw diamond: approximately 33%
Among these: tariffs at 3%; value-added tax at 17%; and consumption tax at 10%.
2. Finished drills, approximately 41%
Among them: tariffs at 9%; value-added tax at 17%; and consumption tax at 10%.
3. Export tax rebate rate: approximately 13%
II. The Revised Diamond Tax Policy
1. Raw diamond 17%
Among them: Tariff 0%; Value-Added Tax 17%; Consumption Tax 5% (to be shifted to the retail stage). ??? 2. Finished drill 17%
Among these: Tariff 0%; Value-Added Tax 17%; Consumption Tax 5% (shifted to the retail stage).
3. Process for export, with full tax refunds.
III. Diamond Tax Policies Involving the Diamond Exchange Since Its Establishment
Diamonds imported from overseas are exempt from customs duties, value-added tax at the import stage, and consumption tax.
Diamonds are traded on the exchange and are exempt from value-added tax.
· Domestic diamonds enter the exchange and enjoy export tax rebates.
Diamonds imported through exchanges are exempt from tariffs but subject to a 17% value-added tax.
The consumption tax on diamond imports and the production stage will be shifted to the retail stage, and the consumption tax on unmounted finished diamonds and diamond jewelry will be levied at a reduced rate of 5%.
IV. Newly Revised Policy for Diamond Import and Export Management
Under general trade, diamond imports and exports are centralized at the Diamond Exchange Customs for customs declaration.
Diamond imports and exports under processing trade shall continue to be handled in accordance with the current policies. If such diamonds are to be re-sold domestically, they must be traded through an exchange or registered accordingly.
Diamond imports and exports under general trade (diamonds transferred from processing trade to domestic sales shall be treated as being managed under general trade) must undergo total-quantity registration procedures with the Shanghai Diamond Office.
V. Diamond Import and Export Management Policies Since the Establishment of the Diamond Exchange
Diamond imports and exports under general trade are centrally cleared through customs at the Diamond Exchange.
Diamond imports and exports under processing trade shall continue to be handled in accordance with the current policies. If such diamonds are to be re-sold domestically, they must be traded through an exchange or registered accordingly.
Under general trade, the import and export of diamonds must undergo total-quantity registration procedures with the Shanghai Diamond Office.
Diamonds entering the exchange from abroad or leaving the exchange to go abroad only require filing and registration procedures with the customs at the Diamond Exchange.
Diamonds entering or leaving the country from domestic locations to foreign countries shall undergo import and export customs clearance procedures in accordance with the law.
Diamonds processed within the premises and entrusted to enterprises located in bonded zones or export processing zones shall be subject to customs bonded supervision. If entrusted to enterprises in other regions for processing, they shall be governed by the current regulations on processing trade.
To be processed
6. The original supervision and operation model of the Drilling Exchange (applying the current management measures for bonded zones)
All enterprises must register and be registered within the bonded zone.
Only enterprises registered within the district are eligible to open current account accounts.
VII. The Current Regulatory Model and Related Policies of the Drilling Exchange
All members of the Diamond Exchange can open foreign exchange accounts specifically for diamond trading.
Members with import and export business licenses and registered outside the territory may directly join the association to engage in diamond import and export as well as related cross-border trade activities.
Members without import and export business licenses, after registering within the organization, may engage in diamond import and export business.
Members registered in Pudong, Shanghai, with a registered capital of up to 3 million RMB, can obtain diamond import and export business licenses and directly engage in the import and export of diamonds as well as related cross-border trade activities.