Compliance in China. Challenges of Transparency, Interpretation & Enforcement.

Compliance is one of the biggest challenges facing foreign companies operating in China. While there is a law/policy/regulation/suggested standard promulgated by Beijing for almost every aspect of doing business, for the typical Western owned company operating in China, the problem is two-fold: Interpretation and enforcement of the law varies greatly not only from province to…

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What are the China inbound taxes (VAT and import duty) for building materials?

My company is a Hong Kong based SMB, decoration material supplier, representing a several overseas brands. Would like to know the import duty and VAT rate for importing Japanese/ Italian products into China for tile, mosaic and as such building material. HS codes 69079000 and 69089000.  HS code 69079000 and 69089000 have in import duty for…

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Why am I paying 6% for VAT?

As of 1st August, we (in Australia) are being charged 6% VAT for all export clearance formalities and freights prepaid in China. We pay the Chinese Freight Forwarder or the Shipping Line the VAT, and they in-turn would be paying the Chinese Taxation Office. We will also be paying tax in Australia (on the product,…

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VAT Smoke and Mirrors.

Some exporter in China may use a higher than actual selling price, with the attempt to have more tax drawback. Some of my vendors are also found out by local customs office during export clearance. They are processing trade factory in nature and buy and sell is governed by contract filed with customs office. My…

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VAT rebate differences between trading and manufacturing companies

Is there a difference for export VAT recovery between a manufacturer and a company that purely buys and sells without changing the product in any way? ANSWER: First let’s take a look at what is considered trading and what is manufacturing. And let’s assume that both the trader and the manufacturer are China based legal…

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