The company plans to engage in re-export trade business and is unsure whether taxes are required for re-export trade imports. It is heard that the goods do not enter the country's customs territory and are merely in transit. The company wants to know if taxes are required and which tax types are involved. The best answer states that the key depends on whether the goods enter the country's customs territory. If they do not enter, regular import taxes and fees are generally not required. Temporary storage in a bonded zone and then re-export does not incur taxes, but sales after leaving the zone do. Stamp duty may also be involved, and policies should be understood in advance.
Who Should the Export Agency Payment Be Made To? Come and Find Out!
Resolved
Our company has engaged an agency company to help export goods. Now that the payments are being collected, we are not entirely clear who the export agency payment should be made to. Should it be paid directly to us as the principal, or to the agency company? Are there any rules or things we need to pay attention to? Will there be any trouble if it's paid incorrectly? We hope knowledgeable friends can help answer, thank you!
Trade Expert Insights Answers
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
Generally speaking, the recipient of export agency payments depends on the agreement stipulated in the agency export agreement. There are two common scenarios:
First, payment to the agency company. After the agency company receives the payment, it deducts agency fees and other agreed-upon expenses, and then remits the remaining amount to the principal. The advantage of this is that the agency company can uniformly handle settlement matters with the foreign merchant and can also conveniently address potential issues, such as quality disputes. However, it is important to clearly specify in the agreement the timeline for the agency company to remit funds after receipt and the liability for breach of contract to prevent delays in funds.
Second, the foreign merchant pays the principal directly. However, this method is less common as it may involve issues such as foreign exchange management, and if operated improperly, it may lead to problems like inability to properly reconcile foreign exchange. Regardless of the method chosen, ensure that the agency export agreement clearly stipulates this to avoid subsequent disputes.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
It's usually according to the contract. You pay as the contract states. If it's not clearly written, discuss it with the agency company to see what's convenient, but it's best to have a written agreement.
Olivia LiuYears of service：6Customer Rating：5.0
Foreign Exchange Risk ManagerStart a Chat
See who is responsible for customs declaration and foreign exchange collection. Generally, the one responsible for this area collects the money. If the agency company is responsible, then the payment for goods will first go to the agency company's account and then be transferred to you.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
This depends on the trade model. For pure agency, many payments go to the agency company first, and they then remit to the principal after handling the expenses. If it's a buy-out export, it might be paid directly to the principal.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
You can agree to a joint account in the agency agreement. The foreign merchant deposits the payment into the joint account, and after both parties confirm, it is distributed. This is relatively fair and safe.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
Consult your local foreign exchange administration department. They can provide professional advice on who the payment should be made to from a compliance perspective.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
If the agency company has a good reputation and past collaborations have been smooth, paying the agency company to handle it uniformly can be more hassle-free, as long as the agreement terms are clear.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
Considering tax issues, sometimes the payment method can affect export tax rebates, so you also need to determine who to pay based on tax requirements.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
Communicate with the foreign merchant to understand their preferred payment recipient and determine the final recipient based on the circumstances of all parties.