The Ministry of Finance, General Administration of Customs, and State Taxation Administration have jointly promulgated the "Announcement on Tax Regulations for Goods Crossing the 'First Line' and 'Second Line' of Hainan Free Trade Port and Circulating on the Island," effective from the date of customs closure. The policy delineates a "first line" separating Hainan Free Trade Port from overseas territories and a "second line" distinguishing it from other domestic regions. Eligible entities importing non-taxable goods across the "first line" are exempt from import duties and are not required to make retroactive payments during circulation within the island. However, upon crossing the "second line" into the mainland or when circulating to non-eligible entities, retroactive payments will be necessary. For goods processed by enterprises in encouraged industries with an added value exceeding 30%, import duties are exempted upon entering the mainland across the "second line." This policy encompasses all import-needing entities across the island, with over 6,600 tariff items classified as "duty-free," representing 74% of the total item count.