13.07.30China to Impose 6% VAT on Transportation Charges on August 1

Effective August 1, 2013 China's Ministry of Finance (MOF) and State Administration of Taxation (SAT) will implement the nationwide expansion of Value-Added Tax (VAT) pilot program for transportation and certain service sectors. The first phase of the pilot program kicked off in Shanghai on January 1, 2012 and subsequently expanded to eight other cities and provinces during 2012.

Effective August 1, 2013, the 6% VAT will be collected from shipper clients on all air and ocean freight charges to be paid in China.

Meanwhile, the State Council, in a bid to bolster the nation's economic slowdown, will take supportive measures on small businesses, which will exempt enterprises with monthly sales less than RMB20,000 from levying VAT and sales taxes.