What is the difference between export processing zones and bonded zones in import and export tax incentives

Export processing zone is a country or region in its port or neighboring ports, airports, stations and other places, set aside a certain range, to provide tariff reductions, exemptions and other preferential treatment, to encourage foreign enterprises to invest in the zone to build factories, the production of export-oriented manufactured goods processing area. The purpose of export processing zones is to attract foreign investment, introduce advanced technology and equipment, promote the development of production technology and economy in the region, expand the development of processing industry and processing exports, and increase foreign exchange earnings. Export processing zones are derived from free ports or free trade zones and retain certain free port or free trade zone practices. Generally speaking, free ports or free trade zones are oriented towards the development of entrepot trade and the acquisition of commercial gains, and they are therefore commercially oriented. Export processing zones, on the other hand, are oriented to the development of the export processing industry and the acquisition of industrial gains, and they are industry-oriented.

Export processing zones are generally divided into two types: the first is a comprehensive export processing zones, that is, in the zone can operate a variety of export processing industry, such as the Philippines, Bataan Export Processing Zone operated by the project includes clothing, electronics, plastic products and so on. The second type is specialized export processing zones. That is, in the zone is only authorized to operate a particular export processing products. At present, the countries in the export processing zones tariffs are generally stipulated that all enterprises investing in export processing zones to build factories from foreign imports and production equipment, raw materials, fuels, parts, components and semi-finished products are exempted from import duties, and the production of products exported are exempted from export tariffs.

The bonded zone means a specific area approved by the state and in which the customs bonding system is applied to the activities of specific enterprises in warehousing, processing, re-export trade and other activities. Foreign goods deposited or imported into the bonded zone can be temporarily not pay import taxes, and if re-exported, do not have to pay export taxes. Foreign commodities brought into the zone can be stored, modified, categorized, processed, manufactured, etc. Therefore, in a sense, the bonded zone has a role similar to that of a free port or free trade zone. In many countries, there are public and private bonded zones. The duration of the bond can vary from one month to three years. According to its function of different characteristics of the bonded area has the following categories: specific bonded area, bonded shed, bonded warehouse, bonded factories and bonded showroom.

The exchange of goods between bonded zones and non-bonded zones shall be handled in accordance with the current national policy on import and export of goods. There are 13 bonded zones in China that have been formally approved by the State Council to be established and the isolation equipment has been accepted and qualified by the General Administration of Customs and formally put into operation, namely Shanghai Waigaoqiao, Tianjin Port, Dalian, Zhangjiagang, Shenzhen Shatoujiao, Shenzhen Futian, Fuzhou, Haikou, Xiamen Xiangyu Island, Guangzhou, Qingdao, Ningbo and Shantou.