A Comprehensive Analysis of Stamp Duty on International Freight Contracts: Which Contracts Are Exempt from Taxation?

In the context of the booming international freight industry nowadays, asforeign tradeenterprises or freight forwarding companies often deal with the signing of various international freight contracts and the handling of vouchers. However, regardingthe stamp duty issues of international freight forwarding contracts and related vouchers, are we all clear about it? Today, lets talk about this easily overlooked tax issue and make the complex legal provisions simple and clear.

Does an international freight forwarding contract need to pay stamp duty?

First of all, lets look at a relatively common question:Does the international freight forwarding contract signed by a freight forwarding enterprise need to pay stamp duty?The answer is actually ——No.

According to Article 2 of the Stamp Tax Law of the Peoples Republic of China, stamp duty applies to the types of contracts listed in the Stamp Tax Item and Tax Rate Table attached to this law. These contracts include but are not limited to: loan contracts, sales contracts, contract for work, transportation contracts, lease contracts, storage contracts, etc. It should be noted thattransportation contractsrefer to freight contracts and multimodal transport contracts (excluding pipeline transport contracts). However,a freight forwarding contract is not a freight transportation contract, so according to the Stamp Tax Law, itdoes not fall within the scope of taxable vouchers and thus does not need to pay stamp duty.

Regarding the settlement vouchers for freight advanced payments: If a freight forwarding company advances freight in the agency business, do the freight settlement vouchers generated in this process need to pay stamp duty? According to the Notice of the State Taxation Administration on Several Specific Issues Concerning the Collection of Stamp Duty on Freight Vouchers (Guo Shui Fa 〔1990〕 No. 173), in freight operations, only the two parties directly handling the freight settlement between the carrier and the consignor are the taxpayers of stamp duty. Therefore,the unit handling the consignment business only has the obligation to act as an agent for tax payment, and the freight settlement documents between the agent and the principal do not need to pay stamp duty.

Do international freight vouchers need to pay stamp duty?

The next question is,do international freight vouchers need to pay stamp duty?

In international freight operations, anytransportation documentsthat clarify the business relationship between the carrier and the consignor usually belong to vouchers of a contractual nature and thus also fall within the scope of taxable vouchers. According to the Notice of the State Taxation Administration on Several Specific Issues Concerning the Collection of Stamp Duty on Freight Vouchers (Guo Shui Fa 〔1990〕 No. 173),international freight settlement vouchers should be regarded as taxable vouchers for freight. In different situations, the methods of handling stamp duty may vary:

• For goods transported by Chinese transportation enterprises, whether they are shipped from within or outside China or in transitthe freight settlement vouchers held by Chinese transportation enterprisesshould calculate the tax payable based on the freight of this transportation.
• The freight settlement vouchers held by the consignorshould calculate the tax payable based on the full - distance freight.
• For goodsimport and exportcarried by foreign transportation enterprisesthe freight settlement vouchers held by foreign transportation enterprisesare exempt from stamp duty, but the settlement vouchers held by the consignor still need to pay stamp duty.
• If international freight settlement vouchers are processed abroad, they should pay stamp duty as required when the vouchers are transferred back to China.

Summary: Different treatments of contracts and vouchers regarding stamp duty

• International freight forwarding contractsdo not belong to the types of contracts listed in the Stamp Tax Item and Tax Rate Table, sothey do not need to pay stamp duty.
• In the process of freight forwarding, if there aresettlement vouchers for freight advanced payments, they do not need to pay stamp duty.
• International freight settlement vouchersusually belong to vouchers of a contractual nature, fall within the scope of taxable vouchers, and need to pay stamp duty according to specific circumstances.

In actual operations, understanding these details can help enterprises avoid unnecessary tax issues when signing contracts and handling relevant vouchers, thereby reducing the operating costs of enterprises and improving efficiency. I hope this article can answer some questions about the stamp duty of international freight forwarding contracts and vouchers.