NEW VAT APPLICATION IN CHINA, AUGUST 2013. We hereby inform you that from 01/08/13, a VAT tax will be applied on transport services and logistics operations within Chinese territory. The standard rate will be 6% VAT + local tax on the value ranging between 0 and 1%. - What this tax levied? In our industry, transport and services related to logistics, including freight rates when settled in China, provided they are executed within Chinese territory. - Is it deductible? Yes, similar to Spanish VAT as long as the company that assumes it, it’s located within Chinese territory (not Hong Kong) and as stipulated in applicable regulations. - Does it affect Spanish importers who buy on FOB or FCA? No, because the services generated within Chinese territory are settled by the exporter, which will support the tax and then deduct it. - In what cases could it affect the Spanish importer? When an importer buys under EXW basis (ex-works or ex-factory) or other arrangement by which the Spanish importer is required to hire their own logistics services that are made in China. In these cases, Operinter will invoice such VAT taxes to the Spanish importer, which may not deduct it in Spain and should consider it as a fee on purchases. - We recommend you to check this information with your suppliers to confirm if they know the new rules and their practical application. Many Chinese suppliers are not aware of indirect taxation, and we are afraid that this new application might be considered as an additional cost, therefore being added to their offers for foreign importers. Furthermore, in cases where you are working on EXW conditions (or intended to), please quantify how much this tax might be and if necessary, you could negotiate buying under an Incoterm that does not involve the assumption of VAT in China (FOB, FCA, for example). If you have any doubts or you need more information, please do not hesitate to contact us and we will be glad to assist you in the best possible way.
Posted on: Wed, 07 Aug 2013 09:50:39 +0000
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