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Guide to Administrative Service Item: "Supervision of Duty-Free Shopping for Travelers Leaving Hainan Island"

I. Name of the Service Item: Supervision of Duty-Free Shopping for Travelers Leaving Hainan Island

II. Type of Service: Administrative Inspection

III. Legal Basis:

(I) According to the Announcement of the Ministry of Finance, the General Administration of Customs and the State Taxation Administration on the Duty-free Shopping Policy for Travelers Leaving Hainan Island (Announcement No 33 [2020]):

1. "Offshore duty-free policy" refers to the preferential tax policies for travelers who depart Hainan Island (but not the country) by airplane, train or ship. They can enjoy zero import duty shopping within limited values, quantities and categories. They must make the payment at offshore duty-free shops or approved online sales platforms, and pick up their goods at designated areas of the airport, railway station or wharf. The duty-free policy covers customs duty, import value-added tax (VAT) and consumption tax.

2. "Travelers" means foreign and domestic travelers, including residents of Hainan province, who are at least 16 years old, have valid identification documents (ID cards for domestic travelers, travel documents for visitors from Hong Kong, Macao and Taiwan, and passports for foreign travelers), and have already purchased tickets for an airplane, train or ship to leave Hainan Island but not the country.

3. The duty-free shopping quota is 100,000 yuan ($13,712) per person annually, with no restrictions on the number of purchases. The types of duty-free goods and the quantity limit for each purchase shall be governed by the Annex to this Announcement. The part that exceeds the duty-free shopping quota and quantity limit shall be subject to import duties on personal imports as stipulated by law.

If a traveler leaves Hainan Island after purchasing goods by airplane, train or ship, it shall be recorded as a single duty-free shopping transaction.

4. Duty-free shops shall have both the qualification and authorization to sell offshore duty-free goods. Currently, the shops include Haikou Meilan International Airport Duty-Free Shop, Haikou Mova Plaza Duty-Free Shop, Qionghai Bo'ao Duty-Free Shop, Sanya Haitang Bay Duty-Free Shop, Sanya Phoenix International Airport Duty-Free Shop, Global Premium Duty-Free Plaza in Haikou, Haikou Mission Hills Duty-Free Shopping Mall, Hainan Tourism Duty-Free Shopping Complex and Sanya International Duty-Free Shopping Park.

Business entities with distribution qualifications for duty-free products can participate in offshore duty-free business operations in accordance with relevant regulations.

5. When travelers leaving Hainan Island purchase duty-free goods in offshore duty-free shops or the approved online sales platforms within the quota, quantity and scope as specified by the State, duty-free shops shall deliver goods according to the departure time of the travelers. Travelers shall collect the goods in the designated areas of airports, railway stations and wharves, together with their shopping vouchers, and take all the goods with them when they leave the island.

6. The duty-free commodities shall be purchased for personal use by consumers, not for resale in the domestic market.

7. Anyone who resells, smuggles duty-free commodities or engages in procurement services shall have their actions recorded in their credit history in accordance with laws and regulations, and shall be prohibited from purchasing offshore duty-free goods within three years. If the act constitutes smuggling or violates customs supervision provisions, the Customs shall handle it in accordance with relevant provisions. If the action constitutes a crime, the individual shall be held criminally liable according to the law.

Travel agencies and transportation enterprises, among others, that assist in violating the policy and disrupting the market order shall be subject to industry-wide comprehensive rectification and punishment.

Offshore duty-free shops that sell duty-free goods in violation of relevant provisions shall be dealt with and punished by the Customs in accordance with relevant laws and administrative regulations.

(II) According to the Announcement of the General Administration of Customs on Issuing Supervisory Measures of Duty-Free Shopping for Travelers Leaving Hainan Island ( Announcement No 79 [2020] ):

Article 1 These Measures are formulated pursuant to the Customs Law of the People's Republic of China and related laws and regulations to standardize the customs supervision of duty-free shopping for travelers leaving Hainan Island and promote the construction of Hainan as an international tourism and consumption destination.

Article 2 These Measures shall apply to the supervision by the Customs over travelers leaving Hainan Island who purchase duty-free goods in the duty-free shops on Hainan Island (including the approved online sales platforms, hereinafter referred to as "duty-free shops on the island"), pick up the goods in the designated areas of airports, railway stations and wharves, and take the goods out of the island in a single instance.

Article 3 Duty-free shops on the island shall set up pickup points in the isolation areas (hereinafter referred to as "isolation areas") from Hainan's airports, railway stations and ports to the Chinese mainland, and report to the Customs for approval.

The isolation areas belong to the customs supervision zones, and the relevant setup standards shall meet the Customs supervision requirements.

Article 4 Offshore duty-free shops shall register the electronic data information of duty-free goods as required by the customs before checking them in the warehouse. When travelers purchase duty-free goods and pick them up, offshore duty-free shops shall completely, accurately, and in real time transmit the electronic data of shopping and pickup information of travelers in the format prescribed by the Customs.

Article 5 When purchasing duty-free goods, travelers leaving the island shall take the initiative to provide their valid identity documents or travel documents, as well as the relevant information of the means of transportation leaving the island, as stipulated by the Customs.

Article 6 Travelers leaving the island may purchase duty-free goods in any offshore duty-free shop. If duty-free goods are purchased online, the purchaser and the payer shall be the same person.

After purchasing duty-free goods, each time a traveler departs the island with the goods by means of transportation, it is counted as one duty-free shopping trip.

Article 7 The annual duty-free shopping quota for each traveler leaving the island, the types of duty-free goods, and the quantity limit for each purchase, etc., shall be implemented in accordance with relevant provisions of the announcements of the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration. Duty-free shops shall sell duty-free goods in strict accordance with the sales targets, varieties, quantities and amounts stipulated by the offshore duty-free policy. For the parts exceeding the annual duty-free shopping quota and quantity limit, import duties on inbound articles shall be levied in accordance with regulations.

Article 8 If travelers leaving the island have a surplus or unused portion of their annual duty-free shopping quota, and they need to pay taxes for purchasing goods that exceed the duty-free limit, the Customs shall calculate the tax based on the "retail price of the goods in the offshore duty-free shop minus the remaining duty-free quota" as the dutiable price.

When travelers do not use the annual duty-free shopping quota when shopping or purchasing goods exceeding the quantity limit, the Customs shall calculate the tax based on the retail price of the goods in the offshore duty-free shop as the dutiable price.

Article 9 When levying duties, goods purchased by travelers beyond the annual duty-free shopping quota or the prescribed quantity shall be subject to the tax rate corresponding to the retail price of the goods in the offshore duty-free shops.

Article 10 Travelers leaving the island may complete duty payment formalities with the Customs through offshore duty-free shops. Offshore duty-free shops shall go through duty payment formalities with the Customs in a centralized manner every ten days and shall, within five working days after the Customs issues a duty payment certificate, pay the duty to the designated bank (treasury). In the case of failure to pay the duties within the time limit, the Customs will collect a late fee of 0.05 percent of the amount of outstanding duties per day from the day when the time limit expires until the day when the outstanding duties are paid, up to the maximum amount of the outstanding duties.

The threshold for late payment is 50 yuan ($6.86).

Article 11 Offshore duty-free shops shall seal and mark the duty-free goods that the offshore travelers will pick up in accordance with the regulatory requirements of the Customs and transport the goods to the pickup office in advance.

Before offshore travelers pick up the goods, offshore duty-free shops shall ensure that all exterior seals and marks of the sold duty-free goods are in good condition.

Article 12 After entering an isolation area, travelers who have purchased duty-free goods in urban offshore duty-free shops or online duty-free platforms shall handle the pickup formalities at the pickup offices for the purchased duty-free goods. The offshore duty-free shops shall deliver duty-free goods to the travelers upon verifying that the valid identity documents of the travelers and the vouchers of the means of transportation are correct.

Offshore travelers can pick up the duty-free goods after purchasing them in duty-free shops in the isolation area.

Article 13 If travelers leaving the island need to leave the isolation area due to flight (train, voyage) delays, cancellations and other reasons after picking up the goods in the isolation area, they shall entrust the duty-free goods to the duty-free shops (including the pickup points) for safekeeping, and pick them up after entering the isolation area again when leaving the island.

If travelers leaving the island change their flights (train numbers, voyages) after purchasing duty-free goods and the time of the changed flights (train numbers, voyages) is within 30 days after the original date of leaving the island, the duty-free shops may handle the corresponding formalities for postponed pickup for them. If it exceeds the prescribed time limit, the duty-free shops shall handle the return formalities for them.

If travelers leaving the island return their tickets after purchasing duty-free goods, the duty-free shops shall handle the return formalities for them.

Article 14 If travelers leaving the island return the goods after picking them up, the duty-free shops on the island shall re-handle the formalities for putting the returned duty-free goods into storage. If it is necessary to refund taxes due to the reason of return, within one year from the date of tax payment, travelers leaving the island or offshore duty-free shops shall apply to the Customs. After the Customs approves, it shall issue a tax refund voucher and hand it over to the original taxpayer to go through the tax refund formalities with the designated banks (the state treasury).

If travelers leaving the island need to exchange goods after picking them up, duty-free shops shall ensure that the names, article numbers, specifications and models of the returned duty-free goods and the replaced duty-free goods are entirely consistent and deliver them to travelers leaving the island after the approval of the customs.

Article 15 Offshore duty-free shops shall report the abnormal handling of returned or replaced goods and other duty-free goods to the Customs in a timely manner.

Article 16 If a duty-free shop has any of the following circumstances, the Customs shall order it to make corrections and may give it a warning; if the shop is warned by the Customs more than three times in a calendar year, the Customs may suspend its business of operating offshore duty-free business, with a suspension period of no more than six months; if the circumstances are serious, the Customs may revoke the registration of the offshore duty-free shop. Meanwhile, the offshore duty-free shop shall also make up the corresponding taxes for imported goods:

(1) Selling duty-free goods to objects outside the prescribed scope;

(2) Selling duty-free goods exceeding the prescribed varieties or the prescribed quantity and quota limits;

(3) Selling duty-free goods in areas not approved by the Customs;

(4) Failing to go through the relevant formalities of customs declaration of import, warehouse check-in/out, sales, pickup, writing-off upon verification and so on of duty-free goods;

(5) Leasing, assigning or transferring the right to operate the duty-free shop.

Article 17 For an offshore traveler falling under any of the following circumstances, the Customs shall handle the case in accordance with relevant laws and regulations, and the traveler may not enjoy offshore duty-free shopping policies within three years starting from the date on which the Customs makes the decision and such decision may be included in the relevant credit records in accordance with relevant provisions:

(1) Purchasing duty-free goods for others or reselling purchased duty-free goods on the domestic market for the purpose of making profits;

(2) Providing a false identity certificate or travel certificate, using an identity certificate or travel certificate that does not comply with relevant provisions or providing false offshore information when purchasing or picking up duty-free goods;

(3) Other activities in violation of customs regulations.

Article 18 For anyone who organizes or takes advantage of others' qualifications and quotas for purchasing duty-free goods on the island to purchase duty-free goods to seek illegal benefits and constitutes a violation of customs supervision regulations or smuggling behavior, or for any offshore duty-free shop that commits an act of violating provisions on customs supervision and control or smuggling, the Customs shall handle such act in accordance with relevant provisions of the Customs Law of the People's Republic of China and the Regulations of the People's Republic of China on Implementing Customs Administrative Penalty; if a crime is constituted, criminal liability shall be investigated in accordance with the law.

(III) According to the Announcement of the Ministry of Finance, the General Administration of Customs and the State Taxation Administration on Adding New Methods of Picking up Duty-Free Goods Purchased by Travelers Leaving Hainan Island (Announcement No 2 [2021])

1. Travelers leaving Hainan Island may, when purchasing duty-free goods from offshore duty-free shops (including the approved online sales platforms) based on valid identification documents and information on their departure from Hainan Island, may choose to pick up goods through delivery by post in addition to at designated areas of airports, train stations and wharves. If pickup of goods through delivery by post is chosen, recipients, payers and purchasers shall be the travelers purchasing goods themselves, and the delivery address shall be outside Hainan province. Offshore duty-free shops shall deliver the duty-free goods purchased by the travelers on a one-off basis after confirming that the travelers purchasing goods meet the aforementioned requirements and have left Hainan Island.

2. Residents in Hainan Island who purchase duty-free goods before leaving Hainan Island may choose to pick up goods after returning to Hainan Island, and shall provide their valid identification documents and information on the actual itineraries relating to their departure from Hainan Island when picking up goods after returning to Hainan Island. Offshore duty-free shops shall deliver duty-free goods after confirming that the identity information and the itineraries relating to departure from Hainan Island of the personnel picking up goods meet the requirements.

Residents in Hainan Island include Chinese citizens holding resident identification cards of Hainan province or residence permits or social security cards of Hainan province, and foreign nationals who work and live in Hainan province and hold residence permits.

(IV) According to the Announcement of the General Administration of Customs on Issuing the Supervisory Requirements for the Methods of Picking up Goods through Delivery by Post and after Returning to Hainan Island for the Duty-Free Shopping of Travelers Leaving Hainan Island (Announcement No 13 [2021])

1. An offshore traveler who purchases duty-free goods may choose to pick up the goods through delivery by post if the purchaser, payer and recipient are all the same traveler and the receiving address is outside Hainan province.

2. Once an offshore traveler chooses to pick up the goods through delivery by post, the offshore duty-free shop shall, after verifying that the traveler meets the post requirements and has indeed left Hainan Island, deliver the duty-free goods purchased by the traveler in a single shipment. The shop shall transmit, in real time, electronic data to the Customs in the format specified by the Customs, complete with an electronic signature. This data shall include transaction and purchaser information, verified personal identification information, delivery waybill and receipt confirmation. The duty-free shop shall bear the responsibility for the authenticity of the data.

3. Residents in Hainan Island (including Chinese citizens holding resident ID cards of Hainan province or residence permits or social security cards of Hainan province, and foreign nationals who work and live in Hainan province and hold residence permits) that have returned to Hainan Island after purchasing duty-free goods prior to their departure from Hainan Island may pick up the duty-free goods at the pickup points for travelers returning to Hainan Island that are set up at offshore duty-free shops. The aforesaid residents in Hainan Island shall, within three months from the date of purchase of such goods, pick up the goods based on their valid identification and the actual itineraries relating to their departure from Hainan Island. If the goods are not picked up within the prescribed time limit, the duty-free shops shall take the initiative to undergo the formalities for the return of goods.

4. At pickup points set up for travelers returning to Hainan Island at offshore duty-free shops, the duty-free goods may be delivered to the relevant purchasers only after the eligibility of the person entitled to pick up goods and the actual itineraries relating to their departure from Hainan Island are verified. The pickup point shall transmit, in real time, electronic data to the Customs in the format specified by the Customs, complete with an electronic signature. This data shall include duty-free product transactions, verified personal identification information, acknowledgment of receipt upon pickup in person, and the itineraries relating to their departure from Hainan Island. The pickup point shall bear corresponding responsibility for the authenticity of the data.

Pickup points for travelers returning to Hainan Island at offshore duty-free shops shall meet the customs supervision requirements and be reported to the Customs for confirmation.

5. If an offshore duty-free shop fails to check the authenticity of offshore travelers' identity information and itinerary information, leading to illegal use of personal identity information or annual purchasing quota, as well as the illegal mailing or pickup of duty-free goods by offshore travelers, and fails to transmit electronic data to the Customs in a timely and accurate manner as required, the Customs shall order it to take corrective action and may give a warning to it. If the Customs has warned it more than three times within a calendar year, the Customs may suspend it from engaging in offshore duty-free business operations for not more than six months.

IV. Implementing Authority: Haikou Customs and subordinate offices responsible for supervising duty-free sales

V. Statutory Processing Time Limit: None

VI. Promised Processing Time Limit: None

VII. Result Name: None

VIII. Sample Result: None

IX. Fee Standard: None

X. Fee Basis: None

XI. Eligibility Criteria: Travelers leaving Hainan Island

XII. Required Materials:

XIII. Processing Procedures:

(I) Departing the island by air:

When purchasing duty-free goods, travelers shall voluntarily present their valid identification or travel documents and provide accurate information about their departure flight itinerary.

Travelers who make duty-free purchases via online offshore duty-free sales platforms must present their identification documents and boarding passes to collect the goods at the designated pickup point in the airport's isolation area and carry the goods when departing the island. Duty-free shopping via the online sales platforms must strictly comply with the relevant offshore duty-free shopping policies.

(II) Departing the island by rail:

Travelers departing the island by rail may purchase duty-free goods at Hainan offshore duty-free shops (but not those located in airport isolation areas) and through their online platforms by presenting their train tickets and valid identification documents.

Travelers must collect their purchased duty-free goods at the pickup point in Haikou Railway Station by presenting their train tickets, purchase vouchers and identification documents, and carry the goods when departing the island.

(III) Departing the island by sea:

Travelers departing the island by ferry may purchase duty-free goods at offshore duty-free shops (but not those located in airport isolation areas) and through their online platforms by presenting their ferry tickets and valid identification documents. The offshore duty-free shops shall, based on the ferry ticket information registered at the time of purchase, deliver the goods in advance to the designated pickup point.

Travelers departing by sea shall collect their purchased duty-free goods at the pickup points at Haikou Xiuying Port or Xinhai Port (a pickup point at Haikou South Port will be established once conditions permit) by presenting their ferry tickets, purchase vouchers, and identification documents, and carry the goods when departing the island.

(IV) Each traveler (including local Hainan residents) is entitled to an annual offshore duty-free shopping quota of RMB 100,000 ($13,712), with no limit on the number of purchases.

(V) If the purchaser, payer and recipient of duty-free goods are all the same offshore traveler, and the delivery address is located outside Hainan province, the traveler may choose to receive the goods via postal delivery.

Residents in Hainan Island (including Chinese citizens holding resident identification cards of Hainan province or residence permits or social security cards of Hainan province, and foreign nationals who work and live in Hainan province and hold residence permits) that have returned to Hainan Island after purchasing duty-free goods prior to their departure from Hainan Island may pick up the duty-free goods at the pickup points for travelers returning to Hainan Island that are set up at offshore duty-free shops. The aforesaid residents in Hainan Island shall, within three months from the date of purchase of such goods, pick up the goods based on their valid identification document and the actual itineraries relating to their departure from Hainan Island.

(VI) Detailed Workflow

Supervision Workflow of Duty-Free Shopping for Travelers Leaving Hainan Island

XIV. Mode of Service: In-person

XV. Number of On-site Visits Required: One

XVI. Review Standards:

(I) Verification of the offshore traveler's identity;

(II) Verification of a valid and authentic departure certificate;

(III) Verification of the duty-free purchases made by the traveler earlier in the same calendar year;

(IV) The amount of duty-free goods purchased during the current transaction.

XVII. Applicable Scope: Within Haikou Customs jurisdiction

XVIII. Appointment Required: No

XIX. Online Payment: Yes

XX. Delivery Services: No

XXI. Processing Location: Designated Haikou Customs service sites or by calling the 12360 hotline

XXII. Working Hours: Haikou Customs office hours or call 12360

XXIII. Inquiry Hotline: 12360

XXIV. Supervision Hotline: 12360

Source: hainan.gov.cn