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Pilot tax increase on cargo in China.

Although it is not completely clear yet, it seems that the Chinese government is planning to introduce a test phase for increasing the VAT on sea freight and local charges. The increase will be 11% over the seafreight and 6% on the local costs in China. The test applies initially only Shanghai.

Should this go on, it will have the necessary financial consequences for shippers. If you buy goods on CFR basis, you may be faced with significant cost increases. Exact consequences are not clear yet, but it appears that due to these new rules it might be more attractive to buy on FOB basis and avoid an additional surcharge of 11%. We wait with baited breath what the Chinese government will decide. If there is something new to report, we will let you know immediately.

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