China Tax Alert - Issue 21, September 2013
The Ministry of Finance (MoF) and the State Administration of Taxation (SAT) jointly issued Notice 53 on 29 August 2013. According to this notice, effective 30 August 2013, the import Value Added Tax (VAT) rate for all aircraft with unladen weight of 25 tonnes or higher shall be increased to 5 percent from the previously reduced rate of 4 percent. Notice 53 abolishes the circular Caiguanshui  No. 43 by which the MoF and the SAT promulgated the reduced rate in 2004.
Coming into force at the same time is Notice 31, which was promulgated by the State Council Tariff Commission on 26 August 2013. According to Notice 31, the provisional import duty rate of 1 percent, which applied to passenger aircraft with unladen weight of 25 tonnes and above, but not exceeding 45 tonnes (tariff code: ex88024010), has been abolished and replaced by the ‘most favoured nation’ rate of 5 percent.