25/7/2013

To all our valued customers,

Please take note of below announcement which will have an immediate impact on China freight charges

In accordance with the new circular 37 of Cai Shui [2013] on “Tax Policy of VAT Pilot Program on Transportation & Modern Services Sector”, jointly issued by the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) of PRC on 24 May 2013, the related VAT tax policy will be expanded nationwide with effect from 1 August 2013. Simultaneously, the regulations regarding the VAT pilot program effective since 1 January 2012 were announced to be abolished. Please refer to Cai Shui [2013] (Circular 37) for more details.

In light of the above, Shipping Lines, Airlines, Freight Forwarders etc classed as the general taxpayer of the Modern (Logistics Business) Service Sector, must adhere to the new regulations. In compliance with the above-mentioned policy, an additional 6% Value-Added Tax (VAT) will be levied on top of the freight and charges payable at China starting from 1 August 2013, based on the issuance date of the VAT invoice.

We are still working through the finer detail of these changes but if you have any questions please do not hesitate to contact your assigned customer solutions member.

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