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Tuesday, 14 October 14
THE NEW CHINESE TRANSPORTATION TAX LAW: WHAT DOES IT MEAN FOR GREEK SHIPPING? - DELOITTE
 China has recently promulgated a new law which imposes tax on profits from freights of inbound routes. The objective of the new tax law titled “Provisional Measures on the Collection of Tax on Non-Resident Taxpayers Engaged in International Transportation Business” (Bulletin of the State Administration of Taxation 2014, No. 37) is to strengthen the tax administration of foreign companies operating international transportation business with China.
What has changed?
Until recently, China had only been taxing international outbound routes with an effective tax rate of 1.25% on the gross revenue. The new rules extend the scope of the tax to inbound routes, and increase the tax rate. As of August 1st, 2014, freights of non-resident shipping companies operating in international routes towards Chinese ports are expected to pay a new tax rate (Enterprise Income Tax – EIT) of 25% on profit. The tax is levied on freights on voyage charters and time charters.
How will the new tax be collected?
Currently there are three options for collection, however further clarification is expected:
1. Tax registration in China: Non-resident shipping companies will have to register with Chinese tax authorities and comply with local bookkeeping and tax rules. The tax at the rate of 25% will be levied on the declared net profit, or
2. Tax on deemed profit: where the enterprises are unable to calculate and report taxable income accurately, they can register and pay tax on a deemed profit. The profit rate cannot be less than 15% and the tax rate will be 25%. Therefore, for a freight of $100, it will be deemed that there is a $15 profit, for which a 25% tax will be due (therefore an effective tax rate of 3.75%), or
3. Have tax withheld by an agent: instead of registering with the Chinese authorities, a company can pay the tax at the rate of 25% on the assumed 15% profit, by having the tax withheld by the customer or other persons designated by the local tax authorities as withholding agents.
How does this impact Greek shipping?
The Double Taxation Agreement (“DTT”) and the Merchandise Franchise Agreement (“MFA”), which Greece and China have in place, protect Greek shipping companies or non-Greek shipping companies that are managed by Greek management offices by exempting them from any tax on freight transportation income in Chinese ports. It is important to note that the exemption is not automatic; once the Chinese authorities finalize the filing requirements, close attention shall need to be paid to the completion of necessary documentation in order to secure the exemption.
Additionally, the Greek Government is in the process of setting up further safeguards by amending laws related to tax residency certificates in order to ensure that the Greek shipping companies will be exempted from this new levy. In this case, the impact of the new law could only be compliance requirements and not actual tax costs. However, it is still unclear if the DTT and the MFA mentioned above and the submission of the necessary tax residency certificate will have the power to secure shipping companies exemption from this tax law. Deloitte is following closely any development and will keep its clients informed on any news.
Deloitte’s global shipping leader, George Cambanis, commented, “Provided the proposed amendments to the current Greek law enable management offices to obtain the tax residency certificates which would then exempt Greek shipping companies from this new Chinese tax law the only downside to Greek shipping would be the administrative cost of compliance.”
Source: Deloitte / Hellenic Shipping
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Wednesday, 22 October 14
CAPESIZE MARKET REMAINED UNDER PRESSURE
COALspot.com: The Dry Bulk market closed on the red for yet another week although following Friday sentiment has started to improve on the back of ...
Tuesday, 21 October 14
INDIA'S DIESEL DEREGULATION POSITIVE FOR OIL COMPANIES - FITCH
The Indian government's 18 October decision to deregulate diesel prices will have a positive effect on the national oil marketing companies tha ...
Tuesday, 21 October 14
LOW DEMAND PUTTING COAL SWAPS UNDER PRESSURE
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost on day, week and month.
The swap has lost US$ 1.57 (-3.04%) month on month ...
Monday, 20 October 14
CHINA'S ENVIRONMENTAL POLICIES DO NOT SPELL THE END FOR COAL - WOOD MACKENZIE
China's environmental policies do not spell the end for coal Analysis across energy commodities show coal still accounting for 64% of power mix ...
Monday, 20 October 14
CFR SOUTH CHINA COAL SWAPS FAILED TO PERFORM POSITIVE
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery decreased US$ 3.04 (-4.57%) month over month and US$ 1.75 (-2.68%) week o ...
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- Parry Sugars Refinery, India
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- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- ASAPP Information Group - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
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- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
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- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
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- Tata Chemicals Ltd - India
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- Australian Commodity Traders Exchange
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- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
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- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Coalindo Energy - Indonesia
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- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
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- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
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- Anglo American - United Kingdom
- Romanian Commodities Exchange
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- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
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- White Energy Company Limited
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
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- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
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- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Planning Commission, India
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
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- Simpson Spence & Young - Indonesia
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- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
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