Want to export goods through an agency company and inquire about how much tax needs to be paid for agency company exports, and whether the threshold is divided by amount or if there are other calculation methods. The best answer points out that tax payment for agency company exports cannot be simply divided by amount. Regarding VAT, if the export applies to a refund (exemption) policy and meets the conditions, it can be tax-exempt and refunded; if not applicable, it is deemed domestic sales and taxed. Customs duties are determined by the HS code of the goods, and the tax payment situation needs to be assessed in conjunction with the nature of the goods and policy regulations.
Who Should Pay for Freight Charges in Agency Export?
Resolved
Our company has hired an agent to help export goods, and now there's an issue regarding the payment of ocean freight. We're unsure who is responsible. The agent stated that according to industry practice, they only handle export-related procedures, and the ocean freight should be paid by us. However, I feel that since we've entrusted them with the agency export, this cost should be included in their agency services. I'd like to ask everyone, who ultimately pays for ocean freight in agency exports? Are there any relevant industry regulations or standards?
Trade Expert Insights Answers
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
The payer of ocean freight charges in agency exports typically depends on the agency export agreement signed by both parties in advance. If the agreement clearly stipulates that the ocean freight is to be borne by the principal (i.e., your company), then you will be responsible for payment. If the agreement does not make explicit provisions, generally speaking, the agent's primary responsibility is to assist in handling a series of export procedures such as customs declaration, inspection, and foreign exchange settlement. Ocean freight is not within the normal scope of agency services, so it is highly probable that the principal will bear the cost.
However, in actual business practice, there are cases where agents promise to include ocean freight in the total price of agency services to secure business. If you find the agent's fees too high, you can negotiate with the agent to redefine the scope of cost responsibility. In summary, the key lies in the agreement; if there is no agreement, the principal is inclined to bear the cost, but the specifics can be resolved through negotiation.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
Generally, ocean freight is paid by the party entrusting the export. This is because the agent merely provides agency services, and ocean freight is a cost incurred by transporting the goods, usually not included in the agency service fees.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
This depends on what was discussed when you negotiated the agency business. If it was clearly stated during the discussion that the agency service fee was all-inclusive, then the agent should pay the ocean freight; if it wasn't mentioned, then by common sense, the principal pays.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
For agency exports, the principal typically pays the ocean freight. After all, the agent primarily handles matters related to the export process, and transportation costs are generally borne by the cargo owner.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
If the agency export agreement doesn't specify, then according to industry practice, the company entrusting the export pays the ocean freight. However, you can also discuss it further with the agent.
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
Generally, whoever owns the goods bears the ocean freight. When entrusting agency export, it means the principal pays the ocean freight, unless otherwise agreed.
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
In agency exports, if there is no special agreement beforehand, the ocean freight is basically paid by the principal, and the agent will not bear this cost without reason.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
Under normal circumstances, the principal pays the ocean freight. Of course, if the agent wants to secure the business and agrees to include ocean freight, then the agent pays.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
It mainly depends on the agency agreement. If there are no provisions, the principal usually pays the ocean freight, as it is a direct cost of transporting the goods.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
In most cases, the principal pays the ocean freight. The agent's services are more focused on handling export procedures, and ocean freight is not part of their regular responsibilities.