International transport services (Shipping, Airlines etc.) incorporated within China have been granted an exemption from business tax under a notice issued by the Chinese government.
The Notice, issued jointly by the Ministry of Finance and the State Administration of Taxation, applies to revenues generated from international and regional routes, and applies retroactively from January 1, 2010.
In a statement made to the Hong Kong Stock Exchange, Air China said that, based on actual air traffic revenue earned from international and regional routes, the airline will obtain an estimated benefit of approximately CNY549m (USD80m) for 2009.
Air China stated that it anticipates a consolidated tax rate of 3.21% in 2009, including the business tax, urban maintenance and construction tax and education surcharge.
The exemption applies to any firm or individual that provides international delivery services, including shipping companies, according to the ministry of finance website, and any tax already paid would be refunded.
Cosco Shipping Co., a unit of China Ocean Shipping (Group) Co., also announced an expected CNY42m saving for 2009 from the tax exemption.
