Core Policy - The processing value-added tax exemption policy is a core tax policy of Hainan Free Trade Port, allowing goods with over 30% processing value-added to be exempt from import duties when entering the mainland [3][4][11] - This policy aims to encourage deep processing and has been gradually implemented since its introduction in July 2021 [7][11] Company Benefits - Hainan Hongyan Food Co., Ltd. benefits from a 12% reduction in import duties due to this policy, significantly lowering production costs compared to processing in mainland China [3][4] - Jingrun Pearl Technology Co., Ltd. enjoys a 21% reduction in import duties, allowing for substantial cost savings and expansion plans for retail outlets [7][11] - The policy has led to a total of 43 companies benefiting, with a total exempted sales value of 75.5 billion yuan and tax reductions of 6.5 billion yuan by March 2025 [7][11] Challenges Faced - Companies face challenges in understanding how to meet the 30% value-added requirement, leading to confusion and operational difficulties [8][9] - The lack of clear standards for what constitutes deep processing complicates cost calculations and compliance with the policy [9][10] - Fluctuations in international raw material prices and domestic market acceptance add complexity to production processes, making it difficult for companies to adapt quickly to policy requirements [9][10] Future Considerations - There are calls from companies for adjustments in the calculation of value-added from domestic raw materials to better align with the policy's intent [10] - The Hainan customs authority is working to optimize the application experience for companies and provide support to help them better utilize the policy benefits [11]