China Regulatory Brief: Electric Vehicle Tax Exemptions & VAT Rates for Cargo Industry

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China Clarifies VAT Rate for International Cargo Transport Agency Service

On July 4, the State Administration of Taxation (SAT) released the “Announcement on Value-added Tax (VAT) Issues in International Cargo Transport Agency Service (SAT Announcement [2014] No. 42).” According to the Announcement, taxpayers indirectly engaged in agent services such as international cargo transport, transportation tools entering and departing the port, pilotage arrangement and loading & unloading shall be exempt from VAT. The Announcement will take effect on September 1, 2014.

Electrical Vehicles to Receive Tax Exemption in China

On July 9, Premier Li Keqiang held an executive meeting of the State Council and reached the decision to exempt purchase tax for new energy vehicles. According to the meeting, China will cancel the 10 percent vehicle purchase tax for new energy vehicles (i.e. electrical vehicles) starting September 1, in a bid to boost demand for electric vehicles and address pollution problems. The tax break applies to both locally produced and imported electric cars, plug-in hybrids and fuel-cell vehicles, and will last until the end of 2017.

China Adjusts Anti-Dumping Duties on White Feather Chicken Products from the U.S.

On July 8, the Ministry of Commerce (MOFCOM) released the “Announcement on Reinvestigation of Anti-Dumping and Anti-Subsidy Measures for Imported White Feather Chicken Products Originated from the United States (SAT Announcement [2014] No.44).” According to the Announcement, from July 9, 2014, all importers of white feather chicken from the U.S. will be subject to an anti-dumping tax rate ranging from 46.6 percent to 73.8 percent, and an anti-subsidy tax rate ranging from 4 percent to 4.2 percent.

Foreign Investors to Enjoy National Treatment in Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone

The Qianhai Administrative Bureau recently released the “Administrative Measures for Foreign Invested-Enterprises (FIEs) in the Qianhai Shenzhen-Hong Kong Modern Service Cooperation Zone (Shen Qianhai [2014] No.103).” The Measures lay out the filing and approval procedures for FIEs setting up in the zone, as well as supervision measures. FIEs in the zone are required to submit an annual report between March and June specifying information such as the FIE’s total assets and debts, net asset, sales revenue, total and net profit, taxes paid, foreign investment and employees. The Measures took effect on June 25, 2014 with a validity period of five years.

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