International freight forwarding is the abbreviation of international cargo transportation agency services, belonging to the "Ministry of Finance on the comprehensive promotion of Business tax to VAT pilot Notice" (Finance and Taxation [2016] No. 36) Annex 1 "Business Tax to VAT pilot implementation Measures" under the broker-agent service, is the scope of modern service industry.
Cargo transport agency service refers to the business activities of accepting the entrustment of the consignee, consignor, shipowner, charterer or ship operator, and handling the cargo transport, loading and unloading, warehousing, entry and exit of the ship from the port, pilotage, berthing and other relevant procedures for the consignor in the name of the consignor.
Tax incentives
According to the provisions of Article 18 of Article 1 of Annex 3 of the "Provisions on the Transitional Policy of Replacing Business Tax with Value-added Tax Pilot" in Finance and Taxation [2016] 36, the direct or indirect international cargo transport agency services provided by taxpayers are exempt from value-added tax.
Therefore, if your company is engaged in international freight forwarding services, you can enjoy the VAT exemption policy.
Matters needing attention
(1) Taxpayers providing direct or indirect international cargo transportation agency services, all international cargo transportation agency service revenue collected from the principal, as well as international transportation fees paid to the international transport carrier, must be settled through financial institutions.
3. Where the entruster requests an invoice, the taxpayer shall issue an ordinary VAT invoice to the entruster in full for the income from the agency service of international transport of goods.
When making the declaration, please select the tax deduction item in the VAT declaration schedule: International freight forwarding service is exempt from VAT.
International freight
Basic concept
International cargo transport services belong to transportation services, including land transport services, water transport services, air transport services and pipeline transport services.
International transport services are:
(1) Carry passengers or goods out of China.
(2) Carrying passengers or goods into the country.
3. Carriage of passengers or goods abroad.
Tax incentives
According to the provisions of the first paragraph of Article 1 of Annex 4 of the Document No. 36 of Finance and Taxation [2016], "Provisions on the Application of zero VAT Rate and Exemption Policy for Cross-border Taxable Activities", zero VAT rate applies to international transportation services.
Domestic units and individuals selling services or intangible assets subject to zero VAT rate may waive the zero VAT rate and choose to exempt or pay VAT according to regulations. After giving up the application of the zero VAT rate, the applicant shall not apply for the zero VAT rate within 36 months.
Therefore, if your company provides international freight transportation services, you can forgo the zero tax rate and choose VAT exemption.
When making the declaration, please fill in "cross-border services" under export tax exemption in the detailed form of VAT declaration, and conduct the "VAT Exemption Report for Cross-border Taxable Activities".