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.
How to Calculate Re-export Trade? Please Explain!
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I recently got involved in re-export trade related business and am completely confused about how to calculate re-export trade. For example, I need to understand the calculation of cargo value, taxes and fees during the trade process, and how profit should be accounted for. I hope knowledgeable friends can explain it to me, preferably with actual case studies, to help me understand more clearly.
Trade Expert Insights Answers
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
Re-export trade calculation mainly involves aspects such as cargo costs, transportation fees, taxes and fees, and profit accounting.
Firstly, there's the cargo cost, which is the price of goods purchased from the supplier. For instance, Zhongmaoda purchases a batch of goods worth 1 million US dollars from a supplier in Country A.
Secondly, there are transportation costs, which include fees for transporting from the supplier's country to the transit country, and then from the transit country to the final destination country. Let's assume a total of 200,000 US dollars.
Regarding taxes and fees, the transit country may impose customs duties, VAT, and so on. Let's assume 100,000 US dollars in taxes and fees need to be paid in the transit country.
So, the total cost would be 100 + 20 + 10 = 1.3 million US dollars. If sold to the final customer for 1.5 million US dollars, the profit would be 1.5 - 1.3 = 0.2 million US dollars. In practical operations, it is crucial to understand the costs and policies at each stage for accurate calculation.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
For re-export trade, cargo value is generally based on the purchase invoice amount. Transportation fees are calculated according to actual expenditures; note that prices vary significantly with different transportation methods. For taxes and fees, it is essential to research the transit country's policies, as some transit countries offer tax incentives to attract re-export trade. Profit is the selling price minus the sum of all the aforementioned costs.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
When calculating re-export trade, exchange rate fluctuations must also be considered. For example, different exchange rates at the time of procurement and sale will affect costs and profits. Additionally, if storage fees are involved, they must also be included. If temporary storage of goods in the transit country incurs storage fees, these must be accounted for as costs.
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
When accounting for re-export trade, insurance costs should also be considered. If insurance is purchased for goods during transit, the cost must be included in the total cost. Furthermore, potential losses should be estimated in advance, as this will also affect the final profit calculation.
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
When calculating re-export trade profit, hidden costs must be considered. While individual amounts for things like document processing fees and customs declaration fees may not be large, they can accumulate and impact profit. A comprehensive tally must be made during calculation.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
When calculating re-export trade, the settlement methods with suppliers and customers are also relevant. For example, credit sales or advance payments for procurement will involve capital costs, affecting profit accounting.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
For re-export trade goods, inspection and quarantine fees sometimes also need to be included. If goods require special inspection and quarantine, this expense cannot be overlooked and must be added to the cost.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
In the transit country, there might also be some administrative charges, such as port construction fees. When calculating costs, make sure to investigate thoroughly and don't miss any, otherwise, it will affect profit calculation.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
When calculating re-export trade profit, don't forget labor costs. The costs for employees handling the business should also be allocated, as this is a necessary expenditure for maintaining business operations.