In accordance with the new Circular 37 of Cai Shui [2013] on “Tax Policy of Value Added Tax (VAT) Pilot Program on Transportation & Modern Services Sector”, jointly issued by the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) of P.R. China on 24 May 2013, the related VAT tax policy will be expanded nationwide with effect from 1 August 2013 onwards.

In light of the above, an additional 6% Value Added Tax (VAT) and associated surtaxes will be levied on top of the freight and all surcharges payable at China from 1st August 2013, based on the issuance date of the VAT invoice, which carriers will follow to implement.