During agency import, who is actually responsible for paying VAT?

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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.
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Kevin Huang
Kevin HuangYears of service：3Customer Rating：5.0

E-Commerce Export AdvisorStart a Chat

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.

References: Beijing Jewelry Import Inspection Agency Fees, Do You Really Understand Them?
Richard Wu
Richard WuYears of service：8Customer Rating：5.0

Global Trade Operations ExpertStart a Chat

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.

Sophia Wang
Sophia WangYears of service：6Customer Rating：5.0

International Logistics CoordinatorStart a Chat

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.

Thomas Li
Thomas LiYears of service：7Customer Rating：5.0

Import Licensing AdvisorStart a Chat

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.

Anthony Luo
Anthony LuoYears of service：10Customer Rating：5.0

Trade Compliance ExpertStart a Chat

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.

David Chen
David ChenYears of service：10Customer Rating：5.0

Trade Compliance AdvisorStart a Chat

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.

Emma Zhao
Emma ZhaoYears of service：3Customer Rating：5.0

Export Documentation SpecialistStart a Chat

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.

Robert Tan
Robert TanYears of service：5Customer Rating：5.0

International Market Development AdvisorStart a Chat

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.

Olivia Liu
Olivia LiuYears of service：6Customer Rating：5.0

Foreign Exchange Risk ManagerStart a Chat

If the agent has the import operating rights and declares imports in their own name, then generally the agent pays VAT.

Michael Zhang
Michael ZhangYears of service：10Customer Rating：5.0

Customs Clearance SpecialistStart a Chat

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.

User-submitted questions and answers reflect personal opinions, not the official stance of this website.

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Can input tax be deducted for commissioned agency imports?

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Whose taxes are calculated on the trade volume of agency imports? Please help me answer!

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