Want to know if agency import services are VAT exempt, your company intends to find an agent to handle import business, hoping to understand the tax exemption policy, tax rates, and conditions for exemption. The best answer states that it is generally not exempt, with a tax rate of 6%, but if the three conditions are met: the agent does not advance funds, the seller's invoice is issued to the client and the agent forwards it, and the agent settles with the client based on the actual sales amount and tax amount and charges a separate handling fee, then it can be exempted from tax.
During agency import, who is actually responsible for paying VAT?
Resolved
Our company plans to import a batch of goods through an agency company and we are currently unclear about the VAT payment. We would like to ask, in agency import business, is it us, the principal, who pays VAT, or the agent? Are there any special regulations or different situations involved? We hope you can explain in detail so that we can prepare in advance.
Trade Expert Insights Answers
In agency import business, VAT is generally paid by the recipient of the imported goods or the unit and individual handling customs declaration. If the agent acts in the name of the principal, and the principal bears the relevant import costs and risks, with the agent only responsible for handling customs declaration procedures, in this case, the principal is the VAT taxpayer.
If the agent imports goods in their own name, even if the goods are ultimately delivered to the principal, the agent must bear the VAT tax liability. Additionally, if both parties sign an agency import agreement and clearly stipulate the VAT taxpayer, as long as it does not violate laws and regulations, it should be executed as agreed. In summary, the VAT taxpayer should be determined based on the substance of the business, contractual agreements, and other factors.
Typically, looking at the customs declaration form, whoever is the operating unit for import customs declaration is the one who pays VAT. If the principal is the operating unit, the principal pays; conversely, if the agent is the operating unit, the agent pays.
In practice, if the agent collects and pays for goods without advancing funds and does not bear sales risks, it is more likely that the principal pays VAT. However, the specific situation needs to be considered.
According to regulations, generally, whoever receives the Customs Import VAT Special Payment Notice is responsible for paying and deducting VAT, so it depends on who the payment notice is issued to.
If the agent purely provides agency services and collects agency fees, while the rights and responsibilities related to the imported goods belong to the principal, then it is more reasonable for the principal to pay VAT.
Sometimes tax authorities will judge based on the entire business picture. If the agent leads the import process and controls the goods, they may be deemed responsible for paying VAT.
From a financial and tax perspective, if the principal is directly involved in procurement pricing, etc., the probability of the principal paying VAT is often higher.
When determining who pays VAT, trade contract terms are crucial. The contract's provisions regarding the rights and obligations of both parties and tax responsibilities should be carefully reviewed.
If the agent has the import operating rights and declares imports in their own name, then generally the agent pays VAT.
If the accounts of the principal and the agent are clearly kept, and it can be proven that the goods substantially belong to the principal, then it is more logical for the principal to pay VAT.