The company plans to conduct re-export trade business, inquiring whether re-export trade is taxable in China and which tax categories are involved, and also wants to understand the differences between re-export trade and general trade in terms of taxation. The best answer points out that if the goods do not substantially enter China's customs territory, generally, import-related taxes and fees are not required to be paid, but the profits generated are subject to corporate income tax. Improper operation leading to goods entering special areas without bonded supervision may involve import duties, VAT, etc.
Where to Pay Taxes in Re-export Trade? Let’s Explore!
Resolved
My company is recently preparing to conduct re-export trade business and is quite unclear about the place of taxation. I've heard that determining the place of taxation seems to be related to many factors, such as the actual flow of goods, trade contract stipulations, and so on. I'd like to ask everyone, where exactly are taxes paid in re-export trade? Is it at the goods' transit point, the company's registered location, or somewhere else? I hope knowledgeable friends can explain in detail. Thank you very much!
Trade Expert Insights Answers
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
Determining the place of taxation for re-export trade is relatively complex. Generally speaking, if re-export trade does not involve the physical entry or exit of goods domestically, and transactions are completed solely through document operations, taxes are usually paid at the company's registered location. This is because, at this point, it primarily constitutes the company's trade operating activity, and according to domestic tax administration regulations, companies should declare and pay taxes on their global income at their registered location.
However, if goods undergo actual storage, processing, or other substantive operations at the transit point, the transit point may levy taxes based on the economic activities generated by the goods locally, in accordance with local tax laws. For example, if goods are stored in a transit warehouse for a period, local authorities might levy taxes on the value-added aspects related to the warehousing stage.
Furthermore, if the trade contract has clear stipulations regarding tax liabilities and the place of taxation, and these comply with relevant laws and regulations, they must also be executed according to the contract. In summary, judgment needs to be made by considering multiple factors. It is advisable to communicate with local tax authorities for confirmation to ensure compliant taxation.
Olivia LiuYears of service：6Customer Rating：5.0
Foreign Exchange Risk ManagerStart a Chat
Generally, first check if the goods physically entered a certain region and generated economic activity. If not, then taxation at the company's registered location is highly probable.
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
If there are special stipulations in the contract regarding the place of taxation, as long as they are legal, they must also be followed according to the contract.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
You can consult a professional tax advisor, who can provide accurate advice based on your company's specific business operations.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
If the transit point has special tax policies for re-export trade, taxes might also be paid there.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
Pay attention to the place where ownership of goods is transferred, as this can sometimes also be related to the place of taxation.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
Understand if there are tax treaties between the countries or regions involved in the trade, as this may affect the place of taxation.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
If there is an entrusted agency handling re-export trade-related matters domestically, tax issues at the agency's location might also be involved.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
Examine the flow of goods and capital involved in re-export trade, as this helps in determining the place of taxation.