6% VAT now chargeable on freight costs from China - effective 1st August 2013 - Latest news

Further to our last blog regarding this rule change in China, it seems that it is causing quite a few issues, with lines such as Maersk making a clear statement that they will pass the 6% VAT on to customers, be they direct customers or freight forwarders.

As expected, it is bringing about a change of buying terms with customers who previously purchased on terms where freight charges (port-port) were prepaid (eg CFR,CIF) changing their Incoterms to FOB or EXW.

We've always recommended that importers buy on FOB terms from Asia as you have far more control over the service levels and destination charges and can ask the supplier to back out freight costs from their product prices.
http://theloadstar.co.uk/forwarders-forced-to-duck-and-dive-as-china-imposes-vat-on-ocean-cargo/

Until the next time.


Kind Regards



Andy Cliff