Update on Value Added Tax in China
CMA CGM wishes to inform and alert its customers about an important change impacting Value Added Tax (VAT) declaration and VAT invoicing in Popular Republic of China to be implemented as from August 1st, 2013, for shipping industry. All kinds of freight and Detention & Demurrage revenues paid in China are subject to this new regulation.
CMA CGM has been actively communicating with the Chinese authorities about the impact of Circular Caishui 37* ("Circular 37") on the shipping sector. However, as of today, the Chinese authorities have not issued any clarification or update on the issue.
Therefore, CMA CGM (China) Shipping Co., Ltd, acting as an agent of CMA CGM shipping companies, will apply the new VAT regulation according to Circular 37 to be legally compliant. From August 1st, 2013**, an additional 6% VAT and corresponding local surcharges *** will be levied by CMA CGM (China) Shipping Co., Ltd on top of the freight and all other charges invoiced in Mainland China on behalf of CMA CGM shipping companies.
CMA CGM informs its customers that the invoiced amount of VAT will be deductible if the company is legally eligible to VAT deduction.
CMA CGM continues to actively discuss with Chinese authorities and will communicate all new regulatory announcements.
CMA CGM would like to express its sincere appreciation and gratitude for its customers’ continuous support and cooperation in this matter.
* Notice on Pilot Tax Policies for Nationwide VAT Reform in Transportation Sector and Certain Modern Service Sectors jointly issued by Ministry of Finance and the State Administration of Taxation on May 24th, 2013.
** August 1st, 2013, refers to the invoice issuance date.
*** The local surcharges include City Maintenance and Construction Tax, State Education Surcharge, Local education surcharge and River Management Fee.
For more information, please contact your local CMA CGM office.