Announcement of the State Administration of Taxation on Promulgating the Revised Administrative Measures for the Value-added Tax Exemption for Cross-border Taxable Services in the Collection of Value-added Tax in Lieu of Business Tax (for Trial Implementation)

Announcement of the State Administration of Taxation on Promulgating the Revised Administrative Measures for the Value-added Tax Exemption for Cross-border Taxable Services in the Collection of Value-added Tax in Lieu of Business Tax (for Trial Implementation)

Announcement of the State Administration of Taxation [2014] No.49

August 27, 2014

Upon the approval of the State Council, the railway transportation, postal industry and telecom industry have been subject to the pilot collection of VAT in lieu of business tax. In order to standardize and improve the tax administration for cross-border taxable services, the State Administration of Taxation has revised the Administrative Measures for the Value-added Tax Exemption for Cross-border Taxable Services in the Collection of Value-added Tax in Lieu of Business Tax (for Trial Implementation) (hereinafter referred to as the "Measures"), which are hereby promulgated for implementation as of October 1, 2014. The Administrative Measures for the Value-added Tax Exemption for Cross-border Taxable Services in the Collection of Value-added Tax in Lieu of Business Tax (for Trial Implementation) (Announcement of the State Administration of Taxation [2013] No.52) promulgated on September 13, 2013 shall be annulled simultaneously.

It is hereby notified.

Administrative Measures for the Value-added Tax Exemption for Cross-border Taxable Services in the Collection of Value-added Tax in Lieu of Business Tax (for Trial Implementation)

Article 1 Where entities and individuals within the territory of the People's Republic of China (hereinafter referred to as the "Taxpayers") provide cross-border taxable services (hereinafter referred to as the "Cross-border Services"), the Measures shall apply.

Article 2 The following Cross-border Services shall be exempt from VAT:
1. engineering survey and exploration services for engineering and mineral resources outside the territory of the People's Republic of China (hereinafter referred to as the "Territory").
2. conference and exhibition services for conference and exhibition located outside the Territory.
Organization and arrangement services provided for clients attending conferences and exhibitions held outside the Territory are deemed as conference and exhibition services for conferences and exhibitions located outside the Territory.
3. warehousing services with storage locations outside the Territory.
4. tangible personal property leasing services for subject matter used outside the Territory.
5. postal services and receiving and sending services for export goods.
(1) the postal services for export goods refer to:
A. sending and delivering letters, parcels and other mails out of the territory;
B. issuing stamps outside the Territory;
C. exporting albums and other philatelic items; and
D. providing the cross-border express delivery and logistics services.
(2) the receiving and sending services for export goods refer to the receiving, sorting, delivering services for exported letters and packages.
Where the Taxpayers provide the receiving and sending services for export goods, the tax-free sales volume is the total price and surcharges charged by the Taxpayers from the sender.
(3) postal services and receiving and sending services provided outside the Territory by foreign entities or individuals for exported letters and parcels fall into the category of taxable service totally consumed outside the Territory as provided for by the Article 10 of the Measures for Implementation of the Pilot Collection of Value-Added Tax in Lieu of Business Tax, and therefore are not subject to VAT.
6. distribution and broadcasting services for radio, film and television programs (works) provided outside the Territory.
Distribution services for radio, film and television programs (works) provided outside the Territory refer to the distribution of radio, film and television programs (works) and transfer of coverage or broadcasting rights of sporting events and other cultural and sporting activities to entities or individuals outside the Territory that are used for broadcast and coverage outside the Territory.
Broadcasting services for radio, film and television programs (works) provided outside the Territory refer to broadcasting the radio, film and television programs (works) at the cinema, theater, video halls and other places outside the Territory.
Broadcasting radio, film and television programs (works) outside the Territory through radio station, television stations, satellite communications, the internet, cable television and other broadcast wireless or wired devices located within the Territory are not considered broadcasting services for radio, film and television programs (works) provided outside the Territory.
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