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Shippers and forwarders on the Asia-Europe trade are faced with new charges after carriers confirmed that they would be adding a further 6% to freight rates in response to the Chinese government’s decision to introduce VAT on ocean shipments.

Late last month, Hapag-Lloyd sent a circular to customers that stated that it would be “required to collect the full applicable amount of this VAT from the customer on behalf of the PRC [People’s Republic of China] government and remit it to ...

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  • Michael Kusuplos

    August 15, 2013 at 9:11 pm

    Highly recommend that all of those thinking about changing the INCOTERMS 2010 Rules to avoid the Chinese VAT to look very carefully as to exactly which INCOTERM they employ. FOB may not be the best one to use.

  • Nick Coverdale

    August 16, 2013 at 3:51 am

    Hi Gavin,

    Good on Loadstar. I always follow your articles as you always report the market “as it is”.
    I posted on four different linkedin sites but never got one single comment. Believe me – for air freight this a massive problem, but many people seem to be hiding under the bed hoping it will just go away, which it won’t.

    SALES TAX ON FREIGHT FROM CHINA

    From 01.08.2013 the 6 per cent sales tax must be charged on freight prepaid cargo from China. In the airfreight industry, where do people stand? Whilst the majority of cargo is on freight collect basis, air cargo agents prepay the MAWB, so according to what I have been told, the airline should add this 6 per cent to the freight, but then who is air cargo going pass this onto? The overseas customer?

    With ocean, the rules are the same but I heard (maybe just hearsay) two shipping lines have been granted an exception and do not need to charge the shipper the tax.

    If anybody out there knows more about this subject please share it with us.