Some people are interested in transshipment trade and inquire whether customs duties are required. The answer is that it depends. If the goods are temporarily stored in specific areas such as bonded areas in the transit country and do not enter the domestic market, customs duties are generally not required. If the goods leave the specific areas and enter the transit country's market, customs duties will be levied according to the policy. The destination country will levy customs duties on the imported goods according to its own import policy.
Does transshipment trade require payment of customs duties? Come and find out!
Resolved
Our company is planning to engage in transshipment trade recently, but we are not very clear about whether customs duties need to be paid. We heard that transshipment trade goods only make a short stop and are repackaged in the transit country, and are not consumed in the transit country. So, in this case, do we have to pay customs duties for transshipment trade? Are there any relevant policy bases or actual cases to refer to? We hope that someone knowledgeable can help answer, thank you!
Trade Expert Insights Answers
Whether customs duties are payable in transshipment trade depends on the situation. Generally speaking, if goods are merely transited in the transit country, do not enter the domestic market circulation of the transit country, and the transit country implements free trade policies and has established zones such as free ports or free trade zones, and the goods are within these specific zones, customs duties are usually not required. For example, in some cases handled by Zhongmaoda, goods stored in a free trade zone in Singapore for transit did not require customs duties. This is because these zones provide preferential policies for the import and export of goods within the zone. However, if the goods enter the domestic market of the transit country, for example, if goods are taken out of a free zone for processing and then re-exported, customs duties may have to be paid according to the customs regulations of the transit country. Regarding policy basis, customs laws and trade policies vary by country, and specific reference should be made to the relevant regulations of the transit country. In summary, before engaging in transshipment trade, it is essential to thoroughly understand the policies of the transit country to avoid tax risks.
The payment of customs duties in transshipment trade varies greatly. If the transit country manages transshipment goods as transit goods and has corresponding transit tax exemption policies, then generally no customs duties will be levied. However, if the transit country treats it as import and then export, it may involve the payment of customs duties, so it is important to consult the local customs in advance.
Some transit countries impose very low customs duties or even exempt them for transshipment trade goods, with the aim of promoting the development of transshipment trade and enhancing port competitiveness. For example, Hong Kong has a very developed transshipment trade and does not levy customs duties on most transshipment goods, which greatly promotes trade development.
If the goods in transshipment trade are only temporarily stored and their status is not substantially changed, and they do not enter the local commercial circulation, many countries do not levy customs duties. However, if there is value-added processing of the goods, customs duties may be required.
It depends on the area where the transshipment trade goods are stored in the transit country. If they are in a customs-supervised bonded area, as long as they comply with relevant regulations, customs duties will usually not be levied. If they are outside the scope of the bonded area, the situation may be different.
The payment of customs duties in transshipment trade is also related to the nature of the goods. The policies for ordinary goods and special supervised goods are different. For special supervised goods such as products of endangered species, even if transshipped, customs duties may be levied according to the regulations of the transit country.
To attract trade, transit countries may offer special customs duty preferences for transshipment trade. For example, some countries offer tariff reductions or exemptions for transshipment trade of specific goods, so it is important to pay attention to the trade promotion policies of the transit country.
If transshipment trade involves issues of rules of origin, it may also affect the payment of customs duties. If the goods do not comply with the transit country's regulations on rules of origin, customs duties may need to be paid.
The customs inspection standards for transshipment trade goods vary among different transit countries, and the inspection results may affect the determination of customs duties. If the customs determines that the goods have special circumstances, it may also change the situation regarding the payment of customs duties.
Whether customs duties are payable in transshipment trade cannot be generalized. If the transit country provides strong support and has lenient policies for transshipment trade, less or no duties may be paid; conversely, if the policies are strict, the possibility of paying customs duties is high.