In a joint effort to bolster healthcare services, China’s Ministry of Finance, National Health Commission (NHC), General Administration of Customs, State Taxation Administration, and National Medical Products Administration (NMPA) have announced a “zero tax” policy on drugs and medical devices imported through the Hainan Free Trade Port. The initiative targets medical institutions, medical education entities, and pharmaceutical research institutes operating within the Boao Lecheng International Medical Tourism Pilot Zone in Hainan. These entities, recognized as independent legal bodies, are now exempt from import tariffs and value-added taxes on NMPA-approved drugs and licensed devices used within the pilot zone, excluding vaccines. This policy is effective immediately and is confined to the Lecheng Pilot Zone.
To facilitate the import of tax-exempt drugs and medical devices, entities must first have their products verified by the Hainan Medical Products Administration to ensure compliance with policy regulations. They must then notify local customs and tax departments in writing. The tax reduction and exemption procedures are to be processed through the pilot zone’s customs unit.
Eligible medical training and pharmaceutical research institutions are permitted to import duty-free drugs and devices solely for personal use within the pilot zone. Authorized medical institutions can dispense tax-free drugs and devices to patients receiving treatment on-site via prescriptions. It is emphasized that duty-free drugs and devices obtained by patients are for personal use only and are prohibited from being resold or used outside the designated area. They cannot be removed or transported outside the zone. Any transfer of tax-free drugs and devices must be approved in advance by relevant health and drug supervision departments in Hainan.
Post-implementation, the Hainan government is tasked with enhancing the oversight of the use and disposal of these duty-free drugs and devices. The government is instructed to swiftly address any illegal or irregular activities. A mandatory quarterly report detailing the implementation status, including the basic information of entities qualifying under the policy, import and sales data of duty-free drugs and devices, and tax reduction figures, must be submitted to the issuing bureaus. – Flcube.com
