When using FOB terms in export trade, inquiries are made about who bears the agency freight and miscellaneous expenses under the FOB export mode. The best answer states that by convention, the seller bears the agency freight and miscellaneous expenses for goods before they cross the ship’s rail at the port of shipment, and the buyer bears them after they cross the ship’s rail. However, in actual practice, contracts can have special agreements, and the key is to clearly define cost sharing in the contract.
How is the export tax rebate returned to the seller by the agent? Experts, please advise!
Resolved
Our company has engaged an agent to assist with export tax rebate matters. The refund process is almost complete, and we would like to inquire about the general methods by which agents return export tax rebates to sellers. What are the specific operational procedures? Are there any risks that we need to be aware of in advance? We hope that experienced friends can provide detailed explanations so that we have a clear understanding and avoid any complications that might affect the company's cash flow.
Trade Expert Insights Answers
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
There are generally two common ways for agents to return export tax rebates to sellers. One is that after the agent receives the tax refund, they deduct agency fees and other related expenses, and then transfer the remaining amount directly to the seller. For example, if Zhongmaoda receives a tax refund of 100,000 yuan and the agency agreement specifies a fee of 10,000 yuan, then 90,000 yuan will be transferred to the seller. Another method is that after the goods are exported, the seller first receives an advance payment of a certain proportion of the tax refund, and then any overpayment or underpayment is adjusted after the actual tax refund is received.
The operational process is roughly as follows: the agent completes the tax rebate declaration, the tax authorities review and approve, and issue the tax refund, then the agent calculates the fees and transfers the funds to the seller according to the agreement.
Regarding risks, firstly, it is crucial to ensure that the agency company is legitimate and professional; otherwise, errors in the declaration may lead to delays or inability to receive the tax refund. Secondly, both parties should clearly define the time, method, and fees for the tax rebate refund in the agency agreement to avoid disputes.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
Generally, the agent will reconcile the relevant fee details with the seller within a few working days after receiving the tax refund, and then transfer the funds to the seller if there are no issues. It is important to note that the refund time should be clearly stipulated when signing the agency agreement, otherwise disputes may arise.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
Some agents return the tax rebate to the seller in batches, with each batch of goods corresponding to one tax rebate refund. The seller should communicate with the agent in a timely manner to understand the progress of the tax rebate so as to receive the funds sooner. At the same time, the seller should also keep good records of export-related documents for inspection.
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
For long-term cooperative agents, monthly settlement of tax rebate refunds may be adopted. The tax refund amount and fees are tallied each month, and settlements are made at the end of the month. However, regardless of the method, it is important to pay attention to changes in tax policies to avoid impacting tax rebates.
Olivia LiuYears of service：6Customer Rating：5.0
Foreign Exchange Risk ManagerStart a Chat
Before an agent refunds the tax rebate to the seller, they usually provide a fee statement, which includes agency fees, interest on advances (if any advances were made). After the seller confirms the statement is correct, the agent will make the payment. It is important to carefully review the statement to prevent arbitrary charges.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
In practice, some agents may provide an estimated tax refund to the seller and adjust it once the actual amount is determined. However, estimates may not be accurate, so sellers should be mentally prepared for potential discrepancies when there are overpayments or underpayments.
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
During the process of returning tax rebates to the seller, delays may occur due to bank transfer issues. The seller can agree with the agent on how to handle such delays, such as the agent paying a certain amount of interest to compensate for the fund utilization.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
When the tax refund amount is large, the agent may refund it to the seller in multiple installments to alleviate financial pressure. The seller should negotiate with the agent on the proportion and timing of each refund.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
If there are situations such as tax authorities requesting additional information during the tax rebate process, it may affect the refund time. The seller and the agent should actively cooperate with such requests to expedite the completion of the tax rebate and the receipt of funds.