A company involved in re-export trade business inquired whether re-export trade requires stamp duty, the basis for calculating the payable amount, and practical operational considerations. The best answer indicates that re-export trade requires stamp duty, calculated based on the amount stated in the contract and the prescribed tax rate, such as purchase and sales contracts being stamped at 0.03%. Practical operations require accurate determination of contract nature, timely declaration, and so on.
How is Re-export Trade Taxed Domestically? Come and Find Out!
Resolved
Our company plans to engage in re-export trade and wants to understand how it is taxed domestically in advance. I've heard that the tax policies involved in re-export trade are quite complex. I'm not sure which specific tax types are involved and how the tax rates are stipulated. Given that the goods are merely transiting through the country and not actually entering the domestic consumption market, will the taxation in this situation be significantly different from general trade? I hope to receive a professional and detailed answer. Thank you!
Trade Expert Insights Answers
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
The taxes involved in re-export trade domestically primarily include value-added tax (VAT) and corporate income tax.
Firstly, regarding VAT, re-export trade is essentially within the scope of service trade. If a domestic enterprise only provides re-export trade services and does not involve actual import and sales of goods, VAT will not be levied. However, if the enterprise provides auxiliary services such as warehousing to overseas entities during the re-export trade process, eligible cross-border taxable behaviors will be subject to zero-rate or tax-exempt policies for VAT.
Secondly, regarding corporate income tax, income obtained by enterprises from engaging in re-export trade should be included in taxable income and corporate income tax should be paid at a tax rate of 25%. If the enterprise meets tax preferential conditions such as being a small-scale low-profit enterprise, it can enjoy corresponding preferential tax rates. Compared to general trade, re-export trade has significant differences in taxation because goods are not actually imported, and import-related taxes such as customs duties are not involved. Enterprises need to accurately grasp the policies and handle taxes properly.
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
Re-export trade does not involve customs duties because the goods do not enter the domestic customs territory. However, attention should be paid to clear accounting, otherwise it will affect the calculation of corporate income tax.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
When an enterprise engages in re-export trade, it should retain relevant contracts, logistics documents, and other materials for tax inspection and accurate tax declaration.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
The key to VAT treatment for re-export trade depends on the nature of the service. For purely re-export trade services, they are not within the scope of VAT taxation.
Olivia LiuYears of service：6Customer Rating：5.0
Foreign Exchange Risk ManagerStart a Chat
It is important to properly preserve related transportation invoices and other documents in re-export trade, as this is helpful for cost accounting and corporate income tax calculation.
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
If an enterprise has re-export trade mixed with other businesses, they must be accounted for separately, otherwise tax treatment is prone to errors.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
Pay attention to tax treaties. Depending on the treaty, there may be preferential treatment for taxes involving overseas partners.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
Tax declarations for enterprises engaged in re-export trade should be timely to avoid unnecessary penalties due to overdue filings.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
Commissions paid in re-export trade can be deducted when calculating corporate income tax, as long as they meet the relevant regulations.