The government of China has published various circulars since Dec. 2005 to make adjustments to its import/export tax system regarding hides and skins，semi-finished leather and finished leather. It was summarized as follows:

1. Adjustment of collection of the customs duty and VAT

--- a. The importation of rawhides and skins (HTS4101-4103), where the inputs are subsequently converted to semi-finished leather (HTS4104-4106) or finished leather (HTS4107, 4112-4115) and re-exported, must be subject to the normal customs duty and VAT of 17%. Namely, the importers must pay the customs duty and the VAT on the importation of these items.

--- b. The importation of rawhides and skins (HTS4101-4103), where the inputs are subsequently converted to leather products (shoes, bags, leather garments, etc) and re-exported: customs duty and VAT free. It is scheduled to expire December 31, 2008.

--- c. The importation of raw furskin (HTS4301), semi-finished leather (HTS4104-4106) and finished leather (HTS4107, 4112-4115), where the inputs are subsequently converted to finished leather or leather products (shoes, bags, leather garments etc.): customs duty and VAT free.

2. Adjustment of VAT rebate on some rawhides and skins, semi-finished leather and finished leather

The China government authorities has made some changes in the VAT rebate percentages on the exportation of certain rawhides and skins, semi-finished leathers and finished leathers.

--- Products with the cancellation of export tax rebate

4101-4103     Raw hide
4104-4106     Semi-finished leather (wet blue, crust leather, etc.)
4301          Raw furskin

41071120  Tanned full-grain unsplit whole piece of horsehide
  
41071220  Tanned grain split whole piece of horsehide

41071910  Tanned whole piece of horsehide for machine belt use

41071990  Other tanned whole piece of cow and horse hides

41079100  Tanned full-grain unsplit piecemeal cow and horse hides

41079910  Tanned piecemeal cow and horse hides for machine belt use

41079990  Other tanned piecemeal cow and horse hides

41133000  Tanned further processed hairless reptile skins (hides)

41139000  Other tanned further processed hairless reptile skins (hides)

41141000  Oil-tanned hides

41142000  Coat of paint and lamination hides, metallic-plating hides

41151000  Reconstructed (reproduced) hides based on hides or the fabric of hides

41152000  Leftover bits and pieces of hide or reconstructed hide; hide powder.

--- Products with a lowering export tax rebate to 8%

41071110  Tanned full-grain unsplit whole piece of cowhide

41071210  Tanned grain split whole piece of cowhide

41079200  Tanned grain split piecemeal cow and horse hides

41120000  Tanned further processed hairless sheep or lamb hides

41131000  Tanned further processed hairless goat or small goat hides

41132000  Tanned further processed hairless pigskins.