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Fiscal Incentives Part Of China's Shipping Modernization

by Mary Swire, Tax-News.com, Hong Kong

08 September 2014


The State Council has issued new guidelines for the development of China's shipping industry in the next five years, that will include the introduction of tax incentives.

The Council recognized that shipping has "an important role to play in safeguarding national maritime rights and economic security, and promoting the development of foreign trade and industrial restructuring and upgrading." However, it was also noted that, while it comprises more than 240 firms, China's present shipping fleet carries only around one-quarter of the country's total international trade, despite the fact that more than 90 percent of that trade is carried by sea.

The reforms, to be carried out over the period to 2020, will be intended to "optimize the structure" of the industry, giving "full play to the decisive role of the market in allocating resources." Shipping firms will be encouraged to merge together and introduce energy-saving and cost-efficient ships, thereby restructuring and modernizing their fleets, while international shipping hubs will be developed in, for example, Shanghai.

Learning from the experience of developed countries, the Government will also look to improve and create favorable fiscal and taxation policies related to international shipping, with the Council's guidelines also looking to encourage foreign investors and private companies into the sector, particularly within Shanghai's pilot Free Trade Zone.

TAGS: tax | marine | tax incentives | commerce | China | trade

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