NITL Requests Clarification on China’s New VAT Tax
The National Industrial Transportation League (NITL) requested help with obtaining clarifications from the People’s Republic of China (PRC) regarding its new value-added tax (VAT) on Aug. 14, NITL said. In letters to the U.S. Department of State, Federal Maritime Commission and the U.S. Department of Transportation’s Maritime Administration, NITL CEO Bruce Carlton said the new tax (see 13080111) has created confusion over its scope and application, “especially on freight moving between the two countries.” A copy of one of the letters is (here).
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According to the PRC, the tax applies to domestic shipping, logistics, and freight forwarding in China and not specifically to international ocean freight. However, Carlton said NITL has monitored reports “that some ocean carriers and non-vessel operating common carriers are simply passing on the tax to their customers in the form of surcharges or service charges even when the freight charges have been ‘pre-paid.’” The NITL’s request for clarification seeks to “end this confusion” and “bring greater certainty to the application of the VAT on international ocean transportation” for shippers within the region and the U.S., Carlton said. The State Department, FMC and Maritime Administration didn't comment.