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.
What Taxes Are Generally Required for Agent Export? Help Me Understand!
Resolved
My company plans to engage an agent company for export business, and I'd like to understand what taxes are required to be paid during the agent export process. Are these taxes paid by the agent company or by us, the principal? I hope for a detailed explanation so I can have a clearer understanding of this matter, and feel more confident when communicating with the agent company.
Trade Expert Insights Answers
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
The types of taxes involved in agent export primarily include Value-Added Tax (VAT) and customs duties.
Firstly, regarding Value-Added Tax (VAT): If export goods are eligible for VAT refund (exemption) policies, such as when a manufacturing enterprise entrusts a foreign trade enterprise to agent export its self-produced goods, the "exempt, offset, refund" tax method is implemented. This means VAT at the export stage is exempted, the corresponding input VAT can be offset against the payable VAT, and any remaining un-offset portion is refunded. The principal is responsible for handling tax refund-related matters. If export goods are subject to VAT exemption policies, VAT at the export stage is exempted, but the corresponding input VAT cannot be credited or refunded.
Secondly, regarding customs duties: Customs duties are generally paid by the principal, calculated based on the type, quantity of export goods, and their corresponding customs duty rates. Typically, the agent company only provides agency services, and the actual bearer of the taxes and fees is mostly the principal, but the specifics depend on the terms agreed upon in the agency agreement between both parties.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
Generally, VAT is the major portion. If a tax refund can be obtained, it's quite beneficial for the principal. However, it's important to note that some products might not be eligible for export tax refunds or may even be subject to taxation as domestic sales, which can be more troublesome.
Olivia LiuYears of service：6Customer Rating：5.0
Foreign Exchange Risk ManagerStart a Chat
Besides VAT and customs duties, there might also be some surcharges, such as Urban Maintenance and Construction Tax, and Education Surcharge. These are generally calculated based on the amount of VAT and Consumption Tax. If VAT is exempted, these surcharges may not need to be paid.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
Stamp duty may also be involved at times, for example, when signing an agent export contract, stamp duty might need to be paid at a certain percentage of the contract amount. The specific tax rate depends on the nature of the contract, but the stamp duty amount is usually not significant.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
Customs duties depend on the classification of export goods, as different categories have significant rate differences. Agent companies generally assist the principal in calculating customs duties, but the principal usually bears the final payment, unless otherwise stipulated in the agreement.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
Regarding VAT, if the principal is a small-scale VAT taxpayer, export goods are exempt from tax but not eligible for tax refund. This differs from the "exempt, offset, refund" policy for general VAT taxpayers, and needs to be clearly distinguished.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
Regarding Consumption Tax, if taxable consumer goods are exported, and they are subject to ad valorem Consumption Tax, the sales amount of the exported taxable consumer goods is used as the tax basis; if they are subject to specific-rate Consumption Tax, the quantity of the exported taxable consumer goods is used as the tax basis. However, this depends on whether the goods fall within the scope of taxable consumer goods.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
If fees such as port construction fees are involved in the export process, these should not be overlooked. Although not strictly taxes, they are part of the export costs, and are generally borne by the principal.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
Surcharges like Local Education Surcharge also follow VAT and Consumption Tax. If VAT or Consumption Tax changes, it will also change accordingly. The specific collection rates may vary across different regions.