Shipping & Logistics

China Specifies Services Eligible for Zero VAT Rate and VAT Exemption

Jan. 10 – The beginning of China’s pilot value-added tax (VAT) reform has aimed to make transport services and a list of modern services in pilot areas subject to VAT, instead of business tax. Recently, as a new update to the implementation details of the ongoing VAT reform, China’s Ministry of Finance (MoF) and State Administration of Taxation (SAT) clarified that some of these VATable services can enjoy zero VAT rate and VAT exemption.

Zero VAT rate
According to the “Circular on the Application of Zero VAT Rate and VAT Exemption on VATable Services (caishui [2011] No. 131)” issued on December 20, 2011, the following VATable services provided by taxpayers in pilot areas are subject to the zero VAT rate: Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, Shipping & Logistics | Tagged China Tax, China Tax Exemption, China Tax Rebates, China VAT Exemption, China VAT Reform, China Zero VAT Rate, Deduction and Refund, Shanghai VAT Reform | Leave a comment

China Briefing Releases New Business Guide for the Greater Pearl River Delta

Dec. 14 – China Briefing has just released the fourth edition of its regional business guide “The Greater Pearl River Delta: Business Guide to South China” – offering business-minded individuals an up-to-date reference source for all of the key issues concerning setting up and successfully operating a business in South China.

By leveraging its proximity to the special administrative regions of Hong Kong and Macau, the Pearl River Delta (PRD) became the “Greater PRD” – China’s manufacturing heart and a region connected not only through financial ties but through a web of government initiatives to encourage its integration. This has included Closer Economic Partnership Arrangements and massive infrastructure developments such as the Hong Kong-Zhuhai-Macau Bridge.

Having risen to prominence around the pillar cities of Guangzhou and Shenzhen, the Greater PRD today is the home of high-technology in China. While Hong Kong is the regional management center for many high-technology firms, Shenzhen, Dongguan, and Guangzhou are being joined by Zhuhai and Huizhou as centers for the manufacturing of high-technology goods. Continue reading →

Posted in Business, Economy and Politics, FDI and Foreign Trade, Manufacturing, Markets, Shipping & Logistics, South China, Technology | Tagged China Briefing Regional Guides, Doing Business in China, Fujian, Fuzhou, Guangdong, Guangxi, Guangzhou, Haikou, Hainan, Hong Kong, Macau, Pearl River Delta, Shenzhen, South China | 3 Comments

China’s SAT Details VAT Reform Issues in Shanghai

Nov. 18 – The value-added tax (VAT) reform projected to take place in Shanghai next year will be China’s first step towards resolving the issue of duplicate taxation on goods and services. While in the existing Chinese taxation system, most types of services (with the exception of processing, repair and replacement services) are subject to business tax (BT), the coming reform will make a larger amount of services – mostly provided in Shanghai’s transport sector and several modern service sectors – become VATable rather than BTable. The implementation details on the reform were recently specified in a circular co-issued by the State Administration of Taxation (SAT) and the Ministry of Finance (MoF).

The “Circular on Commencing the VAT Reform (Replacing BT Imposition with VAT Imposition) in Shanghai’s Transport Industry and Several Modern Service Sectors (caishui [2011] No.111)” released on November 16, explains multiple issues including services that become VATable, VAT rates, as well as calculation methods, taxpayer status and favorable VAT treatment to specific services. Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, Shipping & Logistics, Technology | Tagged China Reform, China Regulatory, China Tax, China Value Added Tax, Ministry of Finance, Modern Services VAT, Shanghai, Shanghai VAT Reform, State Administration of Taxation, Transport Services VAT, VAT Exemption, VAT Refund | 1 Comment

China Regulates Cargo Owners’ Investment into Domestic Shipping Industry

Nov. 9 – China is tightening regulations on investment by cargo owners into the country’s domestic shipping industry in a bid to avoid excess competition amid the continuing global shipping downturn.

The “Announcement on Further Regulating Cargo Owners’ Investment into Domestic Shipping Industries (MoT Announcement [2011] No.58)” released last month by the Chinese Ministry of Transport (MoT) stressed the following principles: Continue reading →

Posted in Business, FDI and Foreign Trade, Legal and Regulatory, Regulatory Update, Shipping & Logistics | Tagged Cargo Owners, China Logistics, China Regulatory, China Ship Owners' Association, China Shipping, Joint Venture Shipping Enterprises, Ministry of Transport, Self-owned Fleet | Leave a comment

Shanghai to Offer Incentives to Shipping-Related Industries

Nov. 7 – As a city striving to become an international shipping center, Shanghai is brewing a complete package of favorable policies for its shipping-related industries. The new policies are hoped to significantly bring down shipping companies’ tax liabilities to levels similar to the shipping tax burdens seen in Hong Kong, experts say.

According to a report by the Shanghai-based newspaper Dongfang Daily, the government of Shanghai’s Pudong New Area – the city’s trading and financial center with high reliance on international shipping – will announce a series of supportive measures to motivate the development of shipping-related industries. The favorable policy package, which includes one-time subsidies, tax subsidies and soft environment improvement, will be offered to both key shipping companies (such as ship operators, shipping companies and logistics companies) and high-end shipping-related service companies (such as finance leasing companies, shipping insurance institutions, shipping information consulting institutions, shipping brokers, shipping-related legal service institutions and maritime training institutions). Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, Shipping & Logistics | Tagged China Logistics, China Shipping, China Tax, Shanghai International Shipping Center, Shanghai Pudong New Area, Shanghai Shipping One-time Subsidy, Shanghai Shipping Reward, Shanghai Shipping Subsidies, Shanghai Shipping Tax Incentives, Shipping Service Companies | Leave a comment

China Clarifies Business Tax Calculation Method for Rail Transport Operations

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: Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, Shipping & Logistics | Tagged China Business Tax, China Joint Venture, China Joint-stock Companies, China Rail, China Tax, State Administration of Taxation | Leave a comment

Chinese Ministries Not Paying Their Bills, China Eastern Cancels 24 Dreamliners

Oct. 19 – China’s CNR Corporation, a state-owned enterprise that manufactures trains, is having to issue RMB2 billion in one-year bonds in order to finance debt it is owed from the Ministry of Rail, according to the South China Morning Post.

CNR, who are listed in Shanghai, had a negative second quarter in 2011, resulting in an operating loss of RMB8.58 billion against a positive inflow of RMB905 million in the same period last year. The company has firmly left the situation at the door of the Ministry of Rail. Continue reading →

Posted in Aviation, Economy and Politics, FDI and Foreign Trade, Shipping & Logistics | Tagged Air China, Boeing, China Aviation, China Debt, China Ministry of Rail, China Southern, CNR Corporation, Dreamliners, Hainan Airlines, Xiamen Airlines | 2 Comments

Wholly Foreign-owned Shipping Companies to See Relaxed Market Access

Sept. 21 – China will moderately relax market access conditions for wholly foreign-owned shipping companies, allowing them to touch a wider scope of business in the country.

According to the “Circular on Strengthening the Administration of Approval for Wholly Foreign-owned Shipping Companies (jiaoshuifa [2011] No.440)“ released by the Chinese Ministry of Transport (MoT) on August 15, the relaxed policy covers the following aspects:

A foreign shipping company is allowed to directly establish a wholly foreign-owned shipping company in China upon its actual needs, without first establishing a representative office Continue reading →