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Who is responsible for tax declaration in agency export business?
Resolved
Our company plans to find an agency company to help export products, and we are currently unclear about the tax declaration part. We want to know in agency export business, is it the principal or the agent who declares taxes? Will the tax declaration subject change due to some special circumstances? We hope to get a detailed answer to avoid tax issues during cooperation.
Trade Expert Insights Answers
In agency export business, the principal generally handles tax declaration. This is because the principal is the actual owner and beneficiary of the goods, bears the main risks and enjoys the benefits related to the export business, so the tax declaration obligation is usually borne by the principal. However, there are special circumstances, for example, if the principal is a manufacturing enterprise without import and export operating rights, and entrusts a foreign trade enterprise with import and export operating rights to act as an agent for export. In this case, if the agent exports in its own name and handles tax refund procedures, the agent is responsible for declaring tax refunds, and the principal cannot declare repeatedly. However, regardless of the situation, both parties should clearly define the responsibilities related to tax declaration in the agency export agreement to avoid subsequent disputes. At the same time, both parties should keep abreast of changes in national tax policies to ensure compliant tax declaration.
In summary, the subject of tax declaration needs to be reasonably determined based on specific business scenarios and the agreement between the parties.
Generally speaking, if the principal is an enterprise with export operating rights, it is up to the principal to declare taxes. This is because the principal is more familiar with its own products and financial situation, which facilitates accurate declaration.
If the agent and the principal explicitly stipulate in the agreement that the agent will declare taxes, then it will be executed according to the agreement. However, this situation is relatively rare, as the agent may not be as familiar with the specific details of the goods as the principal.
If the principal is a small-scale taxpayer, after the agency export, the principal generally declares taxes according to the relevant regulations for small-scale taxpayers, which is relatively simpler to operate.
If the agency export involves taxable products subject to consumption tax, whether the principal or the agent declares taxes, attention must be paid to the special requirements and procedures for consumption tax declaration.
In actual practice, the principal declares taxes in most cases, but it also depends on the specific requirements and guidance of the local tax authorities, as there may be differences in different regions.
Sometimes changes in tax policies may also affect the determination of the tax declaration subject, so both parties should constantly pay attention to policy dynamics and make timely adjustments.
If the agent purely provides agency services and is not involved in substantive issues such as ownership of goods, then it is basically the principal who declares taxes.
If the principal is a newly established enterprise and is not familiar with the tax declaration process, it can also negotiate with the agent to have the agent assist in completing the tax declaration work, but the responsible subject is usually still the principal.