Notice on Policy of Zero VAT Rate and Tax Exemption Apply to Taxable Services Issued by Ministry of Finance and State Administration of Taxation

Finance and Taxation [2011] No. 131
 
   

To Department of Finance, State Administration of Taxation, Local Administration of Taxation of all provinces, autonomous regions, municipalities and cities to be on the list, and the Bureau of Finance of Xinjiang production and construction corps,
　　　

Subject to the Notice on Printing and Distributing“Trial Spot Plan of Business Tax changing to VAT Levying Policy”Issued by Ministry of Finance and State Administration of Taxation (Finance and Taxation [2011] No. 110) and the Notice on Business Tax changing to VAT Levying Policy in Shanghai Transportation Industry and Some Modern Service Industries (Finance and Taxation [2011] No. 111), hereby the Notice on the policy of zero VAT rate and tax exemption apply to taxable services is as follows:

I、VAT zero rate applies to companies and individuals who provide international transportation services, research and development services and design services to overseas companies.

（I）International transportation services refer to
1.Shipping passengers or goods from China mainland to other countries and regions;
2.Shipping passengers or goods from other countries and regions to China mainland;
3.Shipping passengers or goods in other countries and regions.

（II）Companies and individuals who apply to business tax changing to VAT levying policy, for those who provide international transportation services by means of water route, shall obtain the “International Shipping License”; for those who provide international transportation services by means of overland freight shall grant the “Road Transportation Operation License” and “International Auto Transport Driving License” and the business scope of “Road Transportation Operation License” shall include “international transportation”; for those who provide international transportation services by means of air, shall gain “Public Air Transportation Business License” and the business scope shall include “international air transportation business of passenger, goods and postal forwarding”

（III）Providing design services for overseas company, no real estate design service is included.

II、Companies and individuals who provide VAT zero rate services in trial spot area, provided that the VAT of them applies to the general tax computation method, tax exemption, deduction and refund will be implemented. The tax refund rate will be in accordance with the specified VAT rate on Clause 12.1 to 12.3 of Business Tax Changing to VAT Levying Policy in Transportation Industry and Some Modern Service Industries Implementing Measures (Finance and Taxation [2011] No. 111); Provided that it applies to simple and easy tax computation method, VAT will be exempted.

III、Companies and individuals who provide VAT zero rate services in trial spot area shall have VAT deduction, rebate or exemption declaration to the tax authority monthly. Specific method for management will be set out in separate regulations issued by the State Administration of Taxation, Ministry of Commerce and Ministry of Finance.

IV、Companies and individuals who provide the following taxable services in trial spot area, excluding other services apply to zero rate services set by Ministry of Finance and the State Administration of Taxation, VAT shall be exempted.

（I）Engineering survey and exploration services with projects and mineral resources in overseas countries and regions.
（II）Convention and exhibition services with convention and exhibition services location in overseas countries and regions.
（III）Warehouse service with storage location in overseas countries and regions.
（IV）Tangible movable property leasing services with subject matters in overseas countries and regions.
（V） International transportation services comply with regulation (I), but do not comply with clause (II) of clause I.
（VI）Providing the below taxable services to overseas countries and regions:

1.Technology transfer service, technology consultant service, energy management contracting service, software service, circuit design and testing service, information system service, business process management service, trademark and copyright transfer service, intellectual property service, logistics support service (except for warehouse service), certification service, consultant service. Exclude: energy management contracting service with subject matters in China and certification service, authentication service and consultant service for goods and real estate in China.
2.Advertising service in overseas countries and regions.

V、The Notice hereof be executed from 1st January 2012.