China Shipping moves revenue to Hong Kong arm to lower tax

China Shipping moves revenue to Hong Kong arm to lower tax    To lower its tax payments, China Shipping Container Lines is transferring revenue from many of its international services to a Hong Kong affiliate, a move that converts China Shipping Container Lines (Hong Kong) Co. Ltd. into a container shipping company.
   The Shanghai-based carrier, which recently became a publicly listed company listed on the Hong Kong stock market, said in a company memorandum on rules for its agencies that its tax expenditures have increased fast, and that it will use tax planning. It describes tax planning as “the effective common practices of international liner corporations.”
   Most shipping operations and services will be transferred from the parent company to China Shipping Container Lines (Hong Kong) Co. Ltd., effective Thursday. CSCL (Hong Kong) will sign contracts with the port agents used by China Shipping Container Lines, and will operate most of the company’s services by chartering the ships from the parent company. CSCL (Hong Kong) will set up a representative office in Shanghai, where its parent company is based, and establish offices in 11 ports in mainland China, according to the memorandum. The Hong Kong affiliate will also sign cooperative agreements with other carriers to replace China Shipping Container Lines as the contracting entity.
   However, the transfer of revenue and services from Shanghai to Hong Kong will not affect the personnel, divisions and operational processes of the parent company.
   “After the lines are transferred, shipments by CSCL (Hong Kong) Co., Ltd. must all use the new bill of lading, stamp for dockets, and serial number of bill of lading of CSCL (Hong Kong) Co. Ltd.,” the company notified its agents.
   China Shipping Container Lines said it would continue to handle shipments for U.S. and Canadian exports and imports, as well as shipments between China, Hong Kong and Taiwan, at one end, and Japan and Korea, at the other end, rather than transfer them to CSCL (Hong Kong).
   The Chinese carrier, whose accounts were recently scrutinized by Hong Kong financial advisers, also said the move aims to reduce operating expenses and enhance competence against risks.