The government of China introduced a new provision for non-resident carriers, according to which all their accounts are now taxed at the rate of 6.72%, on August 1, 2013. The initiative is aimed at supporting the interests of national carriers, RZhD-Partner reports.
Until now, Russian and foreign companies have been able to conduct their businesses in China under the same conditions as Chinese entrepreneurs. Previously, foreign carriers enjoyed preferential rates of customs duties if they were from the countries that have "most-favored nation" agreements with China or conducted their businesses in accordance with the general procedures (those from other countries).
The agreement on bilateral trade and economic relations between the government of Russia and the government of China, which provides for granting each other “most-favored conditions” and mutual exemption from customs duties and other taxes, was signed in 1992. However, in reality, many of its provisions were not fully implemented. In addition, trade and economic relations between Russia and China are now regulated by the global rules of the World Trade Organization (WTO).
According to Russian experts, the new regulation will significantly increase costs for all Russian businesses working with China.
