Qingdao has once again been granted a national policy benefit. Effective April 1, the stamp duty exemption policy for offshore trade has been officially implemented in the China (Shandong) Pilot Free Trade Zone Qingdao Area (hereinafter referred to as the "Area"). It is estimated that this policy will reduce the financial burden on enterprises engaged in offshore trade within the zone by over RMB 20 million annually. Qingdao is the only city among northern China's pilot free trade zones to be approved for this preferential policy.
Officials from the Finance Bureau of Qingdao explained that offshore trade refers to a trading method where goods do not enter the domestic market, and domestic traders directly transport goods from the exporting country to the importing country through the transfer of overseas ownership rights. The stamp duty constitutes the primary tax involved in such transactions. Under relevant regulations, enterprises engaged in offshore resale transactions are required to pay stamp duty on sales contracts at a rate of 0.03% of the contract value for both procurement and sales contracts. Following the implementation of this preferential policy, enterprises registered in the Area conducting offshore resale transactions will be eligible for stamp duty exemption on their sales contracts.
After the policy implementation, enterprises in the Area only need to complete filing and verification on the Qingdao New Offshore International Trade Integrated Service Platform to enjoy the preferential policy.
At the Qingdao New Offshore International Trade Integrated Service Platform within the Area, the reporter observed real-time offshore international trade transaction data displayed on the digital screen. A major state-owned enterprise in Shandong recently concluded a crude oil transaction worth USD 60 million, with the producing country and the refining country "linking up remotely" without the cargo docking at any Chinese port.
In recent years, the Area has introduced relevant measures and established the New Offshore International Trade Integrated Service Platform, attracting numerous leading enterprises with large-scale operations and global resource allocation to conduct offshore trade business in the Area. This has effectively promoted the rapid clustering of offshore trade activities.
Statistics show that from 2023 to 2024, the international balance of payments for offshore resale transactions in the Area reached USD 21.5 billion, accounting for over 90% of Qingdao's total and approximately 85% of Shandong's total.
The implementation of the policy will effectively assist enterprises in reducing offshore trade costs. "Last year, we processed overseas entrepot trade contracts valued at over USD 1.5 billion and paid RMB 6 million in stamp duty. After the policy implementation, annual savings equivalent to the leasing fees of three 10,000-ton cargo vessels can be achieved. We plan to allocate these funds to upgrade theZhimeng Risk Control System, with an anticipated 30% enhancement in risk management and operational processing efficiency," said Lu Xiuyuan, Business Manager of the Marketing Department at Shandong Port International Trade Group Co., Ltd.
The policy will also bolster the confidence of small and medium-sized enterprises (SMEs) in engaging in international competition. Wang Jie, Head of Business at Aix (Qingdao) Petrochemical Trading Co., Ltd., noted that the tax exemption policy could save approximately 0.03% in transaction costs per order for the company, a foreign trade SME.
"While the percentage may appear modest, our completion of over USD 400 million in entrepot trade last year would enable us to secure five to eight additional medium-sized orders. More importantly, we can now participate in international bidding with greater flexibility and have recently received cooperation proposals from two new clients in the Middle East," said Wang Jie.
An official from the Area stated that in the next phase, the Area will progressively improve its financial service system, create a more conducive environment for offshore trade development, and further develop the Qingdao New Offshore International Trade Integrated Service Platform. The focus will be on expanding entrepot trade in sectors such as bulk commodities and high-end equipment, with the goal of doubling the Area's total offshore trade volume within three years.
A representative from the Finance Bureau of Qingdao stated, "We will strengthen coordination with taxation authorities, relevant departments, and the Area to enhance risk supervision and ensure the smooth implementation of the policy. Additionally, we will conduct diversified outreach activities to ensure targeted policy delivery, maximize the impact of policy implementation, and accumulate more 'Qingdao practices' for offshore trade tax system reform."
The stamp duty exemption policy for offshore trade is scheduled to be implemented from April 1, 2025 to December 31, 2027. The policy applies to regions including the China (Shandong) Pilot Free Trade Zone Qingdao Area, China (Shanghai) Pilot Free Trade Zone and Lin-gang Special Area, China (Jiangsu) Pilot Free Trade Zone Suzhou Area, China (Zhejiang) Pilot Free Trade Zone, Xiamen Area of China (Fujian) Pilot Free Trade Zone, China (Guangdong) Pilot Free Trade Zone, and Hainan Free Trade Port.
