Core Insights - The unique tax system of "zero tariffs, low tax rates, and simplified tax structure" is a competitive advantage for Hainan Free Trade Port, which will release greater policy dividends as the island officially operates under customs closure [1] - Hainan is building an "open and orderly" tax environment to attract global resources while preventing systemic risks, achieving the dual goals of "loose management and strict control" [1] Tax Policy Changes - The "zero tariff" policy will shift to a negative list model post-customs closure, expanding the number of tariff-exempt goods from 1,900 to approximately 6,600, covering 74% of production materials, a 53% increase from before [2] - The policy for duty-free domestic sales of processed goods with a value-added rate of 30% will be optimized, removing the requirement for a 60% revenue share from encouraged main business activities, thus broadening the scope of beneficiaries [2] - The tax advantages will significantly lower procurement costs for enterprises importing raw materials and production equipment, enhancing profit margins for manufacturing [2] Industrial Transformation - The tax policies will fundamentally change Hainan's industrial layout, transitioning from a "multi-point distribution" model to a "core agglomeration area + regional collaboration" model [3] - Key sectors such as raw material-dependent manufacturing, deep processing of agricultural products, and biomedicine are expected to benefit significantly, potentially forming high-end manufacturing and specialty agricultural processing zones [3] - The shift from a "positive list" to a "negative list" management model will enhance customs efficiency and provide a solid institutional guarantee for the free flow of goods [3] Regulatory Framework - Hainan is establishing a transparent and orderly tax environment through defined eligibility criteria, anti-tax avoidance clauses, and strict anti-money laundering mechanisms [4] - The core requirement of "substantive operation" distinguishes Hainan from traditional tax havens, ensuring that tax incentives are closely linked to real economic activities [4][5] Simplified Tax System - The upcoming "simplified tax system" reform aims to promote offshore trade by consolidating various taxes into a sales tax, which will be levied at the retail stage for goods and services [6] - A transitional policy is suggested to allow tax deductions or refunds for pre-reform inventory, preventing tax arbitrage [6] - A "three chains integrated" regulatory system is proposed to enhance monitoring of supply chains, financial flows, and invoicing, ensuring compliance and market inclusivity [7]