The VAT treatment of materials printed and delivered in China depends on the country of the billing address of the customer. When a local Chinese customer places an order for print products on the Gelato website, it enters into a service contract with Gelato China. The Chinese customer will receive an invoice from Gelato China. In this case, Gelato China is legally obligated to pay VAT, local surcharges on VAT, and Stamp Duty and on customer transactions in China. On domestic sales in China VAT of 17% will be added. In addition, local surcharges of 13% of the VAT amount will be added. Finally, Stamp Duty of 0,03% of the total fee, including the VAT and local surcharge will be added.
If the customer billing entity is outside China and would like to purchase printed materials delivered in China, Gelato AS will bill the customer for the printed material. Because Gelato does not have a PE (permanent establishment) or operation presence in China, no Chinese VAT will be included on the invoice from Gelato AS to the non-Chinese customer.