The State Administration of Taxation ("SAT") released on July 4 the Announcement on Value-added Tax Issues concerning International Freight Transportation Agency Services (the "Announcement"), with effect as of September 1, 2014.

The Announcement clarifies that where a pilot taxpayer, through other agents, indirectly handles the international freight of goods for principals or the procedures for the arrival and departure of means of transport for international freight of goods, arrangement of pilotage, berthing, loading and uploading, and other goods and shipping agency services, its value-added tax (VAT) may be exempted in accordance with Paragraph 14 of Article 1 of Attachment 3 to Cai Shui [2013] No. 106. In the meantime, all the service revenue collected by the pilot taxpayer from principals in the provision of the above-mentioned international freight transportation agency services and all the expenses paid to other agents must be settled through financial institutions.

(Source: www.csj.sh.gov.cn)