The Ministry of Finance and State Taxation Administration jointly issued a notice stipulating that, from April 1, 2025 to December 31, 2027, enterprises registered in specific zones such as the Suzhou Area of China (Jiangsu) Pilot Free Trade Zone will be exempt from stamp tax on contracts related to offshore resale transactions. Jiangsu has thus become one of the first provinces, following Shanghai, to be included in this incentive program.

An official from the Tax Policy Division of Jiangsu Provincial Department of Finance explained that offshore trade contracts were often of high transaction values but with low profit margins. Under previous tax rules, a domestic enterprise purchasing goods from an overseas entity and reselling them to another overseas entity would be subject to a stamp tax of 0.03% on both the purchase and sale contracts even when the goods involved never enter or exit China’s customs territory. With the new policy, the combined 0.06% stamp tax will be fully exempted.

It is learned that enterprises in the Suzhou Area of China (Jiangsu) Pilot Free Trade Zone account for over 80% of the province’s total offshore resale transactions in terms of both the number of companies and business scale. “This policy will help reduce operating costs for relevant enterprises in Jiangsu, nurture new business models as new tax sources, attract high-quality international trade resources, boost the development of offshore trade in the free trade zone, enhance its global competitiveness, and promote high-level opening-up,” the official said.

Jiangsu Provincial Department of Finance, in collaboration with Jiangsu Provincial Tax Service and other departments, will communicate the policies to the public via multiple channels, provide guidance to the Suzhou Area in its offshore trade platform development, and formulate supporting policies to accelerate the growth of offshore trade and attract more domestic and international enterprises. Additionally, Jiangsu will summarize relevant experience to provide replicable models for national reforms in offshore trade taxation.