Guotai Haitong: Tax-free policy further optimized, city tax-free market rejuvenated.

Guotai Haitong released a research report stating that recently, the Ministry of Finance, Ministry of Commerce, Ministry of Culture and Tourism, General Administration of Customs, and State Taxation Administration issued a notice to clearly improve the duty-free shop policy starting from November 1, 2025. The aim is to further leverage the duty-free shop policy to support boosting consumption, guide overseas consumption back, attract foreign visitors to consume, and promote the healthy and orderly development of duty-free retail business. Following the new duty-free policy in Hainan Island, the policy is once again strengthened, and the optimization of duty-free pick-up methods in the city is expected to open up growth space. The "notice" improves the duty-free shop policy in the following four aspects: first, optimizing the management of domestic goods refund and tax exemption policies, actively supporting the sale of national products in border exit duty-free shops and city duty-free shops, encouraging duty-free shops to introduce more high-quality products that reflect Chinese excellent traditional culture, and increasing the sales of national products in duty-free shops. Second, further expanding the operating categories of duty-free shops, including more easily transportable consumer goods, adding popular items such as mobile phones, micro drones, sports goods, health food, non-prescription drugs, pet food, etc., enriching travelers' shopping choices. Third, relaxing the approval authority of duty-free shops, delegating approval authority for the establishment of border exit duty-free shops, changes in the determination of operating entities for border exit and entry duty-free shops, optimizing the determination of operating areas for border exit and entry duty-free shops, supporting local areas to integrate and optimize duty-free shop layouts according to local conditions. Fourth, improving the convenience and supervision measures of duty-free shops, supporting border exit duty-free shops, border entry duty-free shops, and city duty-free shops to provide online booking services, allowing travelers to pick up goods at border entry duty-free shops after ordering at city duty-free shops, continuously enhancing the duty-free shopping experience for travelers. The optimization of duty-free pick-up methods in the city has great growth potential. According to the "Interim Measures for the Management of City Duty-Free Shops" issued in 2024, travelers should pick up duty-free goods purchased from city duty-free shops in the border exit isolation area and carry them out of the country at once. Travelers are not allowed to purchase or reserve goods at city duty-free shops, store them at the border, and pick them up upon entry. This "notice" allows travelers to pick up goods at border entry duty-free shops after reserving at city duty-free shops, greatly improving the shopping convenience and consumer experience of city duty-free shops, and benefiting the expansion of the city duty-free market. On August 26, 2025, the city duty-free shops in Shenzhen and Guangzhou jointly created by China Duty-Free Group, Shenzhen Duty-Free Group, Shenzhen SEG Group, as well as the city duty-free shops in Guangzhou jointly created by China Duty-Free Group, Guangzhou Grandbuy, Guangzhou Lingnan Group Holdings, and Guangzhou Baiyun International Airport, were opened, gradually establishing city duty-free shops in core cities.