We wish to inform you that in accordance with the new Cai Shui circular 37 agreed with the MOF (Ministero delle Finanze) and the SAT (State Administration of Taxation) of the People’s Republic of China, the related fiscal policy on VAT will be extended nationwide, as of 1 August 2013.
In line with the new legislation and circular, from 1 August 2013 VAT at a rate of 6% will be added to the cost of all imports/exports of goods.
However, there are some discrepancies in the application of the legislation and it is still being finalized by the relevant authorities, so as soon as we have more details and confirmation regarding this matter we will update you.
In the meantime we will summarize the effects of the new VAT:
IMPORTS FROM CHINA – INCOTERM®2010
- EXW/FCA Chinese VAT on all local prices in China and covering pre-paid international costs from the location specified in the INCOTERM® will appear as a debit in the transportation invoice that we issue to the importer
- FOB/FAS (Sea freight only) No Chinese VAT charge will appear in the transportation invoice that we issue to the importer. (See Note)
- CIF/CFR/CPT/CIP No Chinese VAT charge will appear in the transportation invoice that we issue to the importer; however, the importer, most likely, will find this cost added to the purchase price of the imported goods
- DAP/DDP No Chinese VAT charge will appear in the transportation invoice that we issue to the importer
EXPORTS TO CHINA – INCOTERM®2010
- EXW/FCA No Chinese VAT charge will appear in the transportation invoice that we issue to the importer
- FOB/FAS (Sea freight only) No Chinese VAT charge will appear in the transportation invoice that we issue to the importer. (See Note)
- CIF/CFR/CPT/CIP No Chinese VAT charge will appear in the transportation invoice that we issue to the importer, unless the point of arrival specified in the INCOTERM is an internal Chinese location
