When researching import and export trade, one may not clearly understand what an import freight forwarding unit is. Inquiries are made regarding its definition, its work in the import trade process, and its differences from other logistics units. The best answer points out that import freight forwarding units accept (entrustment) from importers to handle matters related to the transportation of imported goods, playing an important role in booking space, customs declaration and inspection, and transportation and distribution. They are more professional than ordinary logistics companies and can help ensure the smooth completion of import trade.
Who should the freight invoice for agency export be issued to? Come and give me some advice!
Resolved
Our company is engaged in agency export business, and recently we have been confused about the issuance object of freight invoices. We act as agents for clients to export goods, and the transportation process involves freight forwarders and other related parties. Now we don't know whether this freight invoice should be issued to our agency company, or directly to the client who entrusted the export? Are there any relevant regulations and points to note in this regard? I hope friends who understand the industry can explain it to me, otherwise I am afraid of future problems in financial and tax processing.
Trade Expert Insights Answers
Who the freight invoice for agency export is issued to primarily depends on the agreement of the agency export contract and the substantive nature of the business. If the agency company is purely acting as an agent and does not bear the transportation costs, and has agreed with the client that transportation-related costs are directly borne by the client, then the freight invoice is usually issued to the entrusted export client. In this case, the agency company merely assists in handling transportation matters and is not the subject bearing the transportation costs.
If the agency company and the client agree that the transportation costs are included in the agency fee, and the agency company pays the freight uniformly and charges the client, then the freight invoice should be issued to the agency company. This is because, from the substantive nature of the business, the agency company bears the expenditure for transportation costs.
At the same time, in terms of tax treatment, if the invoice is issued to the wrong recipient, it may affect the cost accounting and input tax deduction for the entrusting party or the agency party. Therefore, it is imperative to issue the invoice accurately according to the actual situation and regulations.
Generally, it depends on who pays the freight. Whoever pays should receive the invoice. If the client pays the freight directly to the freight forwarder, then the freight forwarder should issue the invoice to the client; if the agency company pays the freight uniformly, then the invoice should be issued to the agency company.
From a financial perspective, if you want the freight to be reasonably reflected on your company's books and processed accordingly for tax purposes, the invoice should be issued to the entity bearing this expense. For example, if the agency company wants to account for freight as a cost, then it should be issued to the agency company.
It depends on how the contract is signed. If the contract clearly states who bears the freight, the invoice should be issued to that party, which will make subsequent financial processing clearer and comply with regulations.
Generally, the principle of "who benefits, who bears the cost, and who receives the invoice" applies. If the client is the direct beneficiary of the transportation service and bears the freight, the invoice should be issued to the client.
In fact, you can communicate with the freight forwarder, explain the situation of agency export, and ask the freight forwarder to issue the invoice according to the actual cost bearer, which can avoid many subsequent problems.
According to industry practice, if the agency company collects and pays freight on behalf of others, the invoice is issued to the agency company; if the client handles the freight payment themselves, the invoice is issued to the client.
The key still depends on the specific mode of agency export. If it is a buy-out agency, the agency company bears the freight and the invoice is issued to the agency company; if it is a pure agency, the client bears the freight and the invoice is issued to the client.
In practice, it is recommended that the agency company and the client communicate in advance to clarify the recipient of the invoice, so as to avoid disputes arising from invoice issues later.
You can refer to the practices of similar agency export businesses and see how freight invoices are issued in similar situations by other companies as a reference.