Shanghai pilots port of departure tax rebate

Lawrence  -  10:17 AM

Shanghai officially started the implementation of the Port of Departure Tax Rebate Policy jointly issued by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation on 1 August. This policy will help optimise the capital turnover of China's export enterprises and promote the building of a comprehensive test zone for the development of Shanghai into an international shipping centre.

The policy of port of departure tax rebate is a policy that drew most attention in the State Council's document on strengthening the development of Shanghai into an international financial centre and international shipping centre. After the implementation of this policy, export goods shipped from their ports of departure to Shanghai's Yangshan bonded port area for transshipment abroad will be given tax rebate once their departure from their ports of departure has been verified.

The change from "domestic goods for transshipment abroad" to "domestic goods for transshipment via Yangshan" following the launch of this pilot will shorten the time taken by enterprises to get their export rebates, increase the efficiency of capital turnover and utilisation, and effectively reduce the transshipment volume loss to foreign ports each year.

The port of departure tax rebate policy is an innovation for China's export tax rebate policy, said Li Jieyun, deputy director-general of the Tax Policy Department of the Ministry of Finance. The Ministry of Finance, General Administration of Customs and State Administration of Taxation have taken the necessary precautions in respect of online data exchange to prevent frauds and ensure that this policy can produce maximum effects.

This tax rebate policy is implemented on a trial basis for Yangshan-bound cargoes originating from China's coastal city of Qingdao and inland city of Wuhan. Feeder ships carrying the tax rebate cargoes left Qingdao's Qianwan port and Wuhan's Yangluo port for Yangshan when the kickoff of the pilot was announced.

According to Tao Baoxuan, general manager of Sinotrans Hubei Co, over 90% of export goods from the surrounding areas of Wuhan were transshipped via Shanghai. Following the launch of the pilot, Wuhan's export enterprises will be able to receive tax rebates a few days after the goods left its port, about a month sooner than before. This shows that the pilot policy can significantly reduce the liquidity occupation cost and improve capital turnover.

Huang Bin, deputy general manager of Shanghai Puhai Shipping Co that handles the transport of goods from Qingdao to Shanghai said that in order that its clients could get their tax rebates as soon as possible, Puhai chose to use the South Korean port of Busan for the transshipment of goods originating from Qingdao. The implementation of the pilot policy will offer its clients a second choice, as it gives the Yangshan bonded port area the status of "quasi-offshore transshipment port" for the first time.

Due to the distribution of shipping routes and the impact of the tax rebate policy, as many as 3 million TEUs of cargoes are transshipped through Busan each year. These shipments will be the potential business volume for the port of Shanghai in the years ahead. In 2011, the proportion of water-to-water transshipment of containers handled by Shanghai was 41%. The figure rose to nearly 43% in the first half of this year. The implementation of the port of departure tax rebate policy will further increase the proportion of international transshipments and water-to-water transshipments via the Shanghai port.

Content provided by Hong Kong Trade Development Council
Wednesday August 8th, 2012  -  , , , , , , ,  -  No Comments

Shanghai officially started the implementation of the Port of Departure Tax Rebate Policy jointly issued by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation on 1 August. This policy will help optimise the capital turnover of China’s export enterprises and promote the building of a comprehensive test zone for the development of Shanghai into an international shipping centre.

The policy of port of departure tax rebate is a policy that drew most attention in the State Council’s document on strengthening the development of Shanghai into an international financial centre and international shipping centre. After the implementation of this policy, export goods shipped from their ports of departure to Shanghai’s Yangshan bonded port area for transshipment abroad will be given tax rebate once their departure from their ports of departure has been verified.

The change from “domestic goods for transshipment abroad” to “domestic goods for transshipment via Yangshan” following the launch of this pilot will shorten the time taken by enterprises to get their export rebates, increase the efficiency of capital turnover and utilisation, and effectively reduce the transshipment volume loss to foreign ports each year.

The port of departure tax rebate policy is an innovation for China’s export tax rebate policy, said Li Jieyun, deputy director-general of the Tax Policy Department of the Ministry of Finance. The Ministry of Finance, General Administration of Customs and State Administration of Taxation have taken the necessary precautions in respect of online data exchange to prevent frauds and ensure that this policy can produce maximum effects.

This tax rebate policy is implemented on a trial basis for Yangshan-bound cargoes originating from China’s coastal city of Qingdao and inland city of Wuhan. Feeder ships carrying the tax rebate cargoes left Qingdao’s Qianwan port and Wuhan’s Yangluo port for Yangshan when the kickoff of the pilot was announced.

According to Tao Baoxuan, general manager of Sinotrans Hubei Co, over 90% of export goods from the surrounding areas of Wuhan were transshipped via Shanghai. Following the launch of the pilot, Wuhan’s export enterprises will be able to receive tax rebates a few days after the goods left its port, about a month sooner than before. This shows that the pilot policy can significantly reduce the liquidity occupation cost and improve capital turnover.

Huang Bin, deputy general manager of Shanghai Puhai Shipping Co that handles the transport of goods from Qingdao to Shanghai said that in order that its clients could get their tax rebates as soon as possible, Puhai chose to use the South Korean port of Busan for the transshipment of goods originating from Qingdao. The implementation of the pilot policy will offer its clients a second choice, as it gives the Yangshan bonded port area the status of “quasi-offshore transshipment port” for the first time.

Due to the distribution of shipping routes and the impact of the tax rebate policy, as many as 3 million TEUs of cargoes are transshipped through Busan each year. These shipments will be the potential business volume for the port of Shanghai in the years ahead. In 2011, the proportion of water-to-water transshipment of containers handled by Shanghai was 41%. The figure rose to nearly 43% in the first half of this year. The implementation of the port of departure tax rebate policy will further increase the proportion of international transshipments and water-to-water transshipments via the Shanghai port.

Content provided by Hong Kong Trade Development Council

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