What taxes are included in the fees for agency import?
Resolved
Our company plans to use an agency to import a batch of goods and would like to understand in advance what taxes and fees will be involved in the agency import process. I haven't dealt with import business before and don't know how much budget to prepare for taxes and fees besides the goods cost. Are there any friends who understand this area who can explain in detail what taxes are involved in agency import and how these taxes are generally calculated?
Trade Expert Insights Answers
The taxes and fees involved in agency import mainly include import duties, import value-added tax, and for some goods, consumption tax.
Import duty is a tax levied by customs on imported goods. The calculation formula is: dutiable value × duty rate. The dutiable value is generally based on the transaction price of the goods, plus transportation and related expenses.
Import value-added tax is a turnover tax levied on the added value generated during the circulation of goods. The calculation formula is: (dutiable value + duty amount + consumption tax amount) × VAT rate.
Consumption tax is an indirect tax levied on specific consumer goods and consumption behaviors at specific stages. Its calculation methods include ad valorem taxation, quantity-based taxation, and composite taxation. For example, the ad valorem taxation formula is: (dutiable value + duty) ÷ (1 - consumption tax rate) × consumption tax rate. Specific taxes and fees need to be determined based on the type of imported goods, country of origin, and other factors.
In addition to the above, there may be some surcharges, such as urban maintenance and construction tax and education surtax, but these are generally calculated based on the actual paid VAT and consumption tax amounts. However, if imported goods are not subject to consumption tax and VAT, these surcharges are usually not levied.
If you are importing specific goods, such as tobacco and alcohol, consumption tax is unavoidable. Moreover, the consumption tax rate varies greatly depending on the product, so you must first determine the product category to accurately calculate the consumption tax.
The import duty rate varies depending on the country of origin of the goods. If the country of origin has signed a relevant trade agreement with China, preferential tax rates may apply, which can save a lot of money.
When calculating import VAT, it should be noted that the VAT rate also changes according to the type of goods. For general goods, it is 13%, but some agricultural products may be subject to lower tax rates.
Remember that the VAT levied by customs on the import link, if it meets the conditions, can be deducted as input VAT, which also affects the company's cash flow.
The calculation of agency import taxes and fees also depends on the trade terms. Under different terms, the responsibility for bearing transportation and insurance costs varies, which will affect the dutiable value.
For some imported goods with specific purposes, there may be tax reduction or exemption policies, such as for scientific research supplies, and companies can inquire and apply in advance.
If the goods are damaged during the import process, it is necessary to communicate with customs in a timely manner to see if it affects the tax calculation.
For some countries or regions with special relations with China, the tax policies for importing their goods may have unique features, which also need attention.