The company plans to conduct re-export trade business, inquiring whether re-export trade is taxable in China and which tax categories are involved, and also wants to understand the differences between re-export trade and general trade in terms of taxation. The best answer points out that if the goods do not substantially enter China's customs territory, generally, import-related taxes and fees are not required to be paid, but the profits generated are subject to corporate income tax. Improper operation leading to goods entering special areas without bonded supervision may involve import duties, VAT, etc.
Does Re-export Trade Levy Taxes? Why?
Resolved
I have recently been studying international trade-related knowledge and am not very clear about the tax policy of re-export trade. Is re-export trade tax-exempt? I heard that re-export trade involves the circulation of goods between different countries and may have special regulations regarding taxation. Therefore, I would like to ask, does re-export trade actually levy taxes? If taxes are levied, which stages are taxed, and on what basis? If it is not taxed, what are the reasons? I hope to receive a professional answer.
Trade Expert Insights Answers
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
Re-export trade is not completely tax-free. In terms of turnover tax, for the re-export of goods, value-added tax is usually not levied because the goods are not actually consumed in the country, and no VAT taxable act has occurred. For example, goods from country A are re-exported to country B through our country. The goods do not enter the domestic market circulation, so no domestic value-added tax is involved. However, the situation of customs duties is different. If goods stay in domestic ports or other areas, some countries may levy certain customs duties or similar fees, which mainly depend on the relevant regulations of the domestic customs and the agreements with the trading countries. From the perspective of income tax, the profits obtained by enterprises engaged in re-export trade must be paid according to the corporate income tax regulations of the country, as this constitutes the operating income of the enterprise. In summary, whether re-export trade is taxed or not needs to be analyzed specifically by tax category and stage, and cannot be generalized.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
In re-export trade, in some free trade ports, there are preferential policies for re-exported goods, which may exempt customs duties, etc. This is to promote trade transshipment and enhance the status of the port or region as a trade hub.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
Some countries impose small additional fees such as port fees and warehousing fees on re-export trade, which are also considered taxes in a broad sense, aimed at compensating for the cost of public resource use generated by the cargo's stay.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
The taxation of re-export trade is related to trade agreements. If two countries have signed relevant agreements, they will be handled according to the agreements, and some taxes may be reduced or exempted.
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
From the perspective of value-added tax, re-exported goods are not consumed in the country and do not generate VAT taxable acts, so VAT is not levied. This is an international practice.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
If re-export trade involves value-adding processes such as cargo processing, some countries may levy corresponding taxes on the processed and added value.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
The taxation policies for re-export trade vary greatly among different countries. For example, Singapore offers many preferential policies for re-export trade taxation, attracting a large volume of re-export business.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
For the service income of re-export trade enterprises, some countries may levy business tax and other taxes according to the regulations related to the service industry.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
For transit goods in re-export trade, some countries impose a symbolic transit tax for management purposes.