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How to pay taxes on goods exported through an agent, does anyone know?
Resolved
Our company plans to export goods through an agent and is not very familiar with the regulations and procedures for tax payment. I would like to ask how taxes are actually paid on goods exported through an agent. Is it paid by the agent or by us, the consignor? What taxes are involved? What is the basis for tax calculation? I hope someone knowledgeable can explain in detail so I can have a clear understanding and avoid future tax issues.
Trade Expert Insights Answers
The tax payment situation for goods exported through an agent needs to be considered on a case-by-case basis. Firstly, regarding Value Added Tax (VAT), if the consignor is a manufacturing enterprise and the goods are self-produced, the "exemption, offset, and refund" tax method is applied. This means that VAT on exports is exempted, and the corresponding input VAT is offset against the output VAT of domestic sales. Any remaining un-offset amount will be refunded. If the consignor is a foreign trade enterprise, the "collection first, then refund" method is generally applied. Taxes are collected according to regulations first, and then refunds are applied for with relevant supporting documents after the goods are exported.
For consumption tax, if the goods are subject to consumption tax, the consignor shall pay the consumption tax when entrusting processing or receiving and selling. If the conditions are met, a refund can be applied for after export, and the consignor generally declares the refund.
The taxpayer is usually determined by the agency agreement. In actual practice, the consignor generally bears the tax responsibility, but the agent has the obligation to assist in handling relevant tax matters.
Generally speaking, VAT and consumption tax are the main taxes involved. For specific tax calculation bases, VAT is based on the Free On Board (FOB) price of the exported goods, and consumption tax is calculated based on the sales amount or sales quantity of taxable consumer goods.
If the consignor is a small-scale taxpayer, VAT on exported goods is exempted, and no refund is processed.
In actual operations, relevant tax declaration materials such as customs declaration forms and invoices should be collected and organized in a timely manner to ensure accurate tax payment and refund applications.
When paying taxes on goods exported through an agent, attention should be paid to changes in tax policies, such as adjustments to refund rates, which can affect the enterprise's tax costs.
It is best for the agent and the consignor to clearly define the division of tax-related responsibilities in the agreement to avoid disputes.
When applying for a tax refund, attention should be paid to the declaration period, as exceeding the deadline may result in the inability to enjoy tax refund benefits.
For businesses involving the re-export of imported processing, the calculation of taxes and refunds is more complex and requires special attention.
Whether it is the consignor or the agent, tax accounting should be done well to ensure the accuracy of data.