Chinese VAT Reform

On Jan. 22nd, 2014, the Chinese Ministry of Finance released an official interpretation to the VAT exemption policy for international freight forwarders in Notice [2013] No.106, clarifying that shipping and airline agents who make payments to international transportation providers directly or indirectly are entitled to VAT exemption.

This clarification brings to an end a period of considerable confusion for the freight industry relative to Chinese VAT. It is undoubtedly good news for freight forwarders both home and abroad as it reaffirms the VAT exemption policy for international freight forwarders, thus bringing China in line with other major trading nations relative to this topic.

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Chinese VAT Reform

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