China Clarifies Business Tax Calculation Method for Rail Transport Operations

Posted on by

Oct. 21 – In its recent announcement, the Chinese State Administration of Taxation (SAT) specified the business tax (BT) calculation method for rail transport operations that are conducted through cooperation among different companies.

According to the “Announcement on BT Issues Concerning Transport Operations Completed through Cooperation among Rail Transport Enterprises (SAT Announcement [2011] No.52),” where joint venture rail transport companies, joint-stock rail transport companies, and other types of rail transport companies conduct cooperative transport operations, the carrier shall calculate its turnover following the formula below:

Turnover = Total consideration received + Additional fees and charges – Transport fees paid to other co-transport parties

The “Negotiable Instrument for Clearing of Services Provided by Rail Transport Enterprises” shall be used as the voucher for turnover deduction, and BT shall be calculated and paid accordingly.

The Announcement took effect on September 26, 2011, and all the unsettled BT issues before the date shall be treated in accordance with the document.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China. The firm specializes in assisting foreign enterprises with their tax obligations. For advice, please email tax@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.

This article is also available on Dezan Shira & Associates’ online business resource library. To view the article, and other regulatory updates, please click here.

Related Reading

The China Tax Guide (Fifth Edition)
This popular book, fully updated with all recent tax changes and amendments, details all taxes in China affecting businesses and individuals, how to calculate the amounts due, tax registration and filing procedures, tax minimization techniques, and claiming VAT rebates. It also details good financial management techniques, handling negotiations with the tax bureau and annual audit and compliance procedures.

Property Transfer Not Subject to Business Tax during Asset Restructuring

China Offers New Incentives to Logistics Industry

Fujian’s Entertainment Industry to Enjoy Lower Business Tax Rates

China Clarifies Business Tax Exemption for Cross-border Equipment Lease Contracts

China Clarifies Business Tax Exemption For Offshore Outsourcing

Leave a Reply

Asia Briefing Bookstore Catalogue 2013