Recently, State Administration of Taxation announced Measures on Managing Altering Business Tax to Added-Value Tax Exempting Added-Value Tax for Cross-border Taxable Service (Provisional) (hereinafter refer to Measures), with effective from 1 Oct 2014.
Accordingly, pose mail service, service of receiving and sending mail, and telecommunication service are added to the category of tax exemption, and in the meantime, the contents and the standard of implementation are stipulated. Specifically, taxpayer who provides international telecommunication service, international SMS service, international MMS Service to the oversea cooperative or individual, and settles consideration through oversea telecommunication cooperative, or whose service beneficiary is oversea communication cooperative, shall be exempted from added-value tax. Furthermore, Measures amends the types of “Written Agreement of Cross-border Service”, and confirms several situations of “being deemed to an oversea income”. For example, the income which is obtained from a third-party settlement China cooperative based on the cross-border service provided by the taxpayer shall be regarded as income from oversea.
（This information is provided by Lawyer Kelly Xie from Guangdong KaiTong Law Firm in friendship. It is not any legal opinion or legal grounds addressed to any organization or individual. For inquiry, please contact Kelly via email at Kelly_xie@ktlf.com.cn or by phone on 13926185641.）