Who is the taxpayer for imported goods handled by an agent? Help me resolve this!
Resolved
Our company plans to import a batch of goods through an agency company, and we are currently unclear about the definition of the taxpayer. We want to know who the taxpayer actually is in the case of imported goods handled by an agent. Is it the principal or the agent? Could the determination of the taxpayer vary due to some special circumstances? We hope to understand this in detail so that we can make appropriate tax arrangements during the import process and avoid future problems.
Trade Expert Insights Answers
The taxpayer for imported goods handled by an agent is generally determined by the taxpayer indicated on the customs duty payment certificate issued by the customs. If the customs duty payment certificate designates the principal as the taxpayer, then the principal is the taxpayer; if it designates the agent, the agent is the taxpayer. Typically, if the agent imports goods in the name of the principal and the principal bears the responsibility for related taxes and fees, the customs will list the principal as the taxpayer. However, if the agent imports in their own name, regardless of the agreement between the agent and the principal, the customs will often consider the agent as the taxpayer. Therefore, the key lies in the notation on the customs duty payment certificate. When your company imports goods through an agent, be sure to pay attention to the taxpayer information on the customs duty payment certificate to determine who bears the tax liability.
Generally speaking, if the agency import contract clearly stipulates that the principal is responsible for the tax burden related to the imported goods, and the ownership of the goods also belongs to the principal, then the principal is more likely to be the taxpayer.
If the agent is only responsible for handling import procedures, and the actual payment of goods and taxes is borne by the principal, then based on the principle of substance over form, the principal is highly likely to be the taxpayer.
In actual operations, it also depends on the import agency business model. If the agent buys the goods outright and then sells them to the principal, in this situation, the agent is the taxpayer when importing the goods.
Sometimes, if the agent and the principal have not clearly defined the taxpayer, the customs will, as a general practice, identify the party that has a direct customs declaration and tax payment relationship with the customs as the taxpayer.
If the principal participates in key aspects such as cargo procurement and pricing, and bears the main risks of the goods, even if the agent handles the import process, the principal may still be considered the taxpayer.
If the agent only collects agency fees and does not participate in the ownership transfer of the goods or the payment of goods, then the principal is more likely to be the taxpayer.
When the agency import business exhibits the substantive characteristics of a principal-agent relationship, such as authorization by the principal and operations by the agent according to instructions, the principal is very likely to be the taxpayer.
From an accounting perspective, if the procurement costs of the goods are reflected in the principal's accounts, it is more reasonable for the principal to be the taxpayer.