It is typical of a socialist country that when things begin to slow, they push the pedal down for more Taxes. It is true of the China government once again as they roll out a sweet 6% Value Added Tax or VAT tax hike replacing the formerly known “Business Tax” across the nation. Affected segments of their sector include “modern services (not sure what that it is) and the transportation industry.
UPS noted it will be following the below guidelines outlined by UPS:
Vendors will pay the VAT tax to UPS – UPS is now in the business of expanding its tax collection divisionUPS will collect VAT taxes on freight and other charges billed inside of China. They will not be collecting charges that occurred outside of the country.The VAT Tax will most likely not affect a lot of United States consignees. HOWEVER!!! BEWARE THAT IF SHIP YOUR PRODUCT VIA “Ex Works” which a lot of U.S. importers do, you may be responsible for that VAT tax. OMG! Did your supplier tell you that when they gave you your really awesome pricing? Heck no…you will just see it show up as a line item in your bill and the product has already been delivered and you could have gotten it that much cheaper from a company likePCB Solutions!
It just goes to show that you need to be really careful about what you are doing and know what you are doing before importing or exporting in and out from any country…especially China where things are complex.
TRADING COMPANIES BEWARE!!! This is the real folly of why you have to have a company you trust. Do you realize that most of the companies contacting you from the web are not the actual factory…they are trading companies and they usually DO NOT HAVE AN EXPORT LICENSE! What a huge shocker it will be when you tell your boss you have a killer price from a new PCB Supplier in China for a shipment of price sensitive Printed Circuit boards only to realize paid 6% more than you originally should have because the product originally quoted was missing the VAT Tax and the company you bought it from is responsible for that VAT tax or other taxes and didn’t pay them…Yes there are dubious fabricators out there that don’t pay their taxes and sneak product across the border. We know, because we had to FIRE a factory what it happened to us!
Don’t let these kinds of potential issues happen to you. It is only a matter of time before they will if you play Russian roulette with yoursupply chainand decide to experiment with an unknown supplier – it goes way beyond quality and price! Oh be wise!