Does the legal entity bear the export tax for agency?
Resolved
Our company has hired an agent to help export goods, and now there's an issue regarding export tax. I'd like to ask, is the legal entity responsible for agency export tax? I'm not quite clear on the regulations here; is it based on mutual agreement, or is there a specific law that mandates the legal entity must bear it? I hope a professional can help answer this. If it's based on agreement, how should this aspect be regulated in the contract?
Trade Expert Insights Answers
The legal entity does not necessarily bear the agency export tax. From a legal perspective, the party responsible for export tax is usually determined by the agreement in the agency export contract. If the contract clearly stipulates that the export tax is borne by the principal (i.e., the company where the legal entity is located), then the company where the legal entity is located must fulfill the agreement; if it is agreed that the agent bears it, then the agent is responsible.
When regulating this matter in a contract, it should be clearly stated that "the export tax shall be borne by [specific responsible party], and all expenses and related legal liabilities arising from the export tax shall be the responsibility of this party." At the same time, it is best to also specify the calculation method and payment timing of the export tax to avoid subsequent disputes. In summary, a clear contractual agreement helps protect the rights and interests of both parties and avoids unnecessary tax disputes.
Generally, it depends on how the contract is signed. If it's not clearly stipulated, there might be disputes, so it's crucial to pay attention to this aspect when signing the contract.
If the legal entity's company and the agent have a good relationship, they can also negotiate to share the export tax, and it doesn't necessarily have to be borne entirely by one party.
Before signing the contract, fully communicate the issue of export tax responsibility, otherwise it will be difficult to resolve afterward and may affect the cooperative relationship.
In addition to contractual agreements, industry practices can sometimes have an impact. It is also necessary to understand how this issue is typically handled in the relevant industry.
If the agent is experienced, they will usually proactively propose an export tax responsibility clause in the contract, at which point the legal entity needs to review it carefully.
If the legal entity's company has special requirements regarding export tax responsibility, it must be raised during contract negotiations; do not try to backtrack after the contract is signed.
A clause can be added to the contract stating that if export tax policies change, the parties will renegotiate the method of bearing the responsibility.
When determining the responsible party for export tax, it is also necessary to consider the tax planning of both parties to see which method is more beneficial overall.