Dear customer,

        In accordance with the new Circular 37 of Cai Shui [2013] on “Tax Policy of Value Added Tax (VAT) Pilot Program on Transportation & Modern Services Sector”, jointly issued by the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) of P.R. China on 24 May 2013, the related VAT tax policy will be expanded nationwide with effect from 1 August 2013 onwards. Simultaneously, the regulations regarding the VAT pilot program effective since 1 January 2012 will be abolished.

        In light of the above, OOCL is defined as an international transport agency in China and as the general taxpayer of the logistics auxiliary industry, is subject to 6% VAT according to the new regulations. In compliance with the policies stipulated in the Circular 37 of Cai Shui [2013], an additional 6% Value Added Tax (VAT) and associated surtaxes^*2 will be levied on top of the freight and surcharges payable at China as of 1 August 2013, based on the issuance date of the VAT invoice, while for customers who do not request for VAT invoice, the effective date will be based on payment date. However, should the concerned government authorities make any further change to the prevailing policies, we will correspondingly adjust the implementation and keep you apprised accordingly.

        In order to avoid any extra tax incurred for your company on those shipments moving on or before 31st July, 2013, we’ll have the following arrangement for your adherence.

1.    For shipments moving on/before 28th July, 2013 (export as per ‘on board date’; import as per ‘actual arrival date’), VAT invoice will be issued before 31st July, 2013 provided that confirmation on the payable amount and the invoice information is received from the payer before 17:30, 29th July, 2013.

2.    For shipments moving between 29th and 31st July and thereafter (export as per ‘on board date’; import as per ‘actual arrival date’), VAT Invoice will be issued and is subject to Value Added Tax and associated surtaxes.

3.    Should there be any change after VAT invoice is issued, please inform our Finance Department in written at respective location before 30th July, 2013. An updated VAT invoice will be re-issued on/before 31st July, 2013, subject to VAT invoice amendment fee at RMB500 per invoice.

4.    For any amendment request received on/after 1st August, 2013, a special VAT invoice is required to apply through the State Administration of Taxation (SAT) of PRC and a subsequent amendment fee at RMB500 will be levied.

5.    For “freight prepaid” and surcharges to be settled elsewhere outside mainland China, customer is required to clear specify the payment office and payer’s full title at the time of Shipping Instruction (SI) submission, otherwise SI amendment fee at RMB400 will be incurred after SI cut-off. Please note that payment elsewhere is subject to additional service charge, if any.

        For any further information, please contact our local sales representatives and/or customer service. Thank you for understanding and continuous support!

                                                            OOCL (CHINA) COMPANY LIMITED

                                                            　　　　　24th July, 2013

*1:    South China includes Guangdong, Guangxi, Guizhou, Yunnan and Hainan Provinces. For arrangement in South China, please refer to separated notice.

*2:    VAT surtaxes include, but not limited to, City Construction Tax, Education Surtax, Local Education Surtax etc. and will vary according to the local tax regulation of the payment location in China.