Circular of the Ministry of Finance and the State Administration of Taxation on Promulgating the Measures for Taxing on Vessel Transportation Revenues of Foreign Companies

Circular of the Ministry of Finance and the State Administration of Taxation on Promulgating the Measures for Taxing on Vessel Transportation Revenues of Foreign Companies


Circular of the Ministry of Finance and the State Administration of Taxation on Promulgating the Measures for Taxing on Vessel Transportation Revenues of Foreign Companies

Cai Shui Zi [1996] No. 87

October 24, 1996

The finance departments (bureaus), offices of the State Administration of Taxation, local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan, and the financial regulatory commissioner offices of the Ministry of Finance in all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan,

Following approval by the State Council, the Measures for Taxing on Vessel Transportation Revenues of Foreign Companies are hereby promulgated (hereafter referred to as the "Measures"), which shall come into effect on the date of promulgation. The Rules on Levying Taxes on Transportation Revenues from Vessels of Foreign Nationalities promulgated by the Ministry of Finance in June, 1974 shall be repealed simultaneously.

Appendix:
Measures for Taxing on Vessel Transportation Revenues of Foreign Companies

Article 1 For the purposes of strengthening the administration of tax collection on the transportation revenues accrued from China by foreign companies engaged in international shipping operations by vessels, these Measures are formulated in accordance with the provisions of the Income Tax Law of the People's Republic of China on Foreign-invested Enterprises and Foreign Enterprises, the Law of the People's Republic of China on Collection and Administration of Taxes and the Interim Regulations of the People's Republic of China on Business Tax.

Article 2 Foreign companies carrying passengers, cargoes and mails out of the territory from Chinese ports by vessel shall, in accordance with these Measures, pay business tax and enterprise income tax levied on their transportation revenues and income.

Article 3 Where a foreign company carries passengers, cargoes and mails out of the territory from a Chinese port by vessels, the carriers who gain transportation revenues shall be taxpayers. Taxpayers include:
1. In the case of a ship time-chartered by a buyer, the foreign ship chartering company is the taxpayer;
2. In the case of a ship under voyage charter, the foreign ship owner is the taxpayer;
3.
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