CHINA’S NEW VAT STARTS 1ST AUGUST

The Chinese Ministry of Finance and State Administration of Taxation has issued Cai Shui Chinese National Fiscal and Tax Policy [2013] No.37: ‘concerning the nationwide transport and part of the modern service industry business tax reform vat pilot tax policies’

The above mentioned notice, proposes that from 1st August 2013 the Pilot Program for China VAT of 6% (on total invoice value) will be applied nationwide, affecting all Chinese domestic Transportation and Handling charges. Therefore, we would like to advise you that all quotes and invoices for freight originating from China will now include the VAT 6% applied to the freight and related origin surcharges. This will be shown as a separate line accordingly on quotes and invoices. We note this will be similar to when GST came into effect; there may be adjustments and reviews to VAT TAX system in China. As these reviews occur we will notify you of any applicable updated changes or interpretations.