Items allowed for deduction under freight forwarding costs

"Provisional Regulations of the People's Republic of China on Value-Added Tax” State Administration of Taxation Order No. 22, Article 8, Paragraph 4 provides:-  Payment of transportation cost of purchased or sale of goods in the production process as well as there payment thereof, according to its settlement documents indicated thereon, transportation costs is the transport fee and at a 7% rate of VAT deduction. VAT formula: VAT = transport costs amount × deduction rate.

To alleviate the burden of VAT tax-payers, the revised provisions of Article 8 expressly provided for this policy. It allows a range of input tax deductable extends to all production processes by paying transportation costs. This understanding allows the deduction of input tax, you need to combine with the provisions of Article 10, namely: non-deductible input VAT for the transport costs of goods and services and the sale of duty-free goods, transport costs, VAT is not calculated to be used to offset the buckle which shall not be deductible transportation costs, it includes: for non-VAT taxable items, VAT exempted items, the collective welfare or personal consumption goods or transport costs incurred, abnormal losses of goods purchased where transport costs incurred, abnormal losses in finished products consumed goods purchased where transportation costs incurred, the State Council Department who in charge of the tax, self taxpayers consumer transportation costs incurred. In addition, sales of exempt goods transport costs or those in accordance with the provisions of Article 8, are deductible when calculating VAT. Newly revised "Provisional Regulations on VAT Implementation Details" Article 18 of the Regulations, Article 8 (4) the amount referred to in this paragraph:  transport costs is stated on the settlement documents as transportation costs (including railway, clinical, pipeline and railway line transportation costs), construction funds, it is not including handling charges, insurance and other incidentals.

Therefore, the allowable deduction of input tax = ( CRCC funds + shipping + Pro and the new line of railway freight shipping ) × 7%. "State Administration of Taxation on Rail Freight Input Tax Deduction Issues related Supplementary Notice" ( Guo Shui Han [ 2003 ] No. 970 ) provides that China Railway Express Company parcels ( referred CRE ) to provide transportation services, belongs to railway transport enterprises. Therefore, the general VAT tax-payers who purchase or sale of goods made in "China Railway Express Waybill” is a small goods.  As stated in Railway Express lump sum fees, excess baggage charges for paying the freight and forwarding charges, according to the net rate of 7% deductible input tax.

Deductible limit:-  "The State Administration of Taxation on VAT Deduction Certificate Deductible Items Issues Related to Notice" ( Guo Shui Han [ 2009 ] No. 617 ) for VAT ordinary tax-payer to obtain the 1 January 2010, after the issuance of the VAT invoices for payment of customs import VAT, road and inland waterway freight transportation uniform invoice, unified motor vehicle sales invoice, deduction period will be adjusted from 90 days to 180 days. However, the regulation does not include rail transport invoices, railway transportation invoice or deductions deadline, it should be based on "State Administration of Taxation on Strengthening Tax Administration and Transport Freight Transportation invoice VAT Deduction Management Notice " ( Guo Shui Fa [ 2003 ] No. 120 ) it provides that, rail transport invoice deductions period remains 90 days.

In addition, the enterprises which obtain a summary of freight invoices for the same tariffs, the same start and end to the multi-batch summary cargo freight invoices issued, such as the consignor, consignee, port of departure, arrival, the mode of transport, goods, cargo quantity, transportation price, the amount of freight and other projects and purchases or sales, they are all listed on the invoice that matches the project, together with a list of transport and transport enterprises stamped invoice, and its summary freight invoices can be deducted.

And now, on the loss of roads, inland freight transport uniform invoice is not clear, so companies will not yet certified as "Roads, inland freight transport uniform invoice " to offset for accidentally lost, it should be according to the tax authorities regulations.