China’s State Administration of Taxation (SAT) issued guidance (Bulletin 42) that extends VAT-exempt treatment to all international freight forwarding services. The new rules went into effect on September 1, 2014.
The China Ministry of Finance (MOF) and the State Administration of Taxation (SAT) have jointly agreed to exempt international transportation from their recently implemented VAT regulations. The revised tax treatment is retroactive to August 1, 2013 when the nationwide regulations first came into effect. A joint circular (Caishui 2013 No 106) has been issued by the MOF and SAT explaining the exemption.