I.Which taxes does the company need to pay on behalf of clients?

In accordance with the current "Provisional Regulations of the People’s Republic of China on Value-Added Tax" andPolicies: Formal export agency companies primarily handle three types of tax payments:

• VATtreatment
  • Buy-outagency:Theagencycompanydeclaresoutputtaxbasedonthefullamountofthegoodsandappliesfortaxrefundwithinputinvoices.
  • Commission-basedagency:Onlytheservicecommissionportionissubjecttoa6%value-addedtax.
• Corporate Income Tax: It is levied at 25% of the total annual profit,and the agency fee income is included in the taxable income.
• Customs duties and import-related taxes: InvolveWhen importing,it is necessary to declare and pay tariffs,consumption taxes,and other duties in accordance with the law.

II.Can entrusting an agent for export enjoy the tax rebate policy?

The latest policy in 2025 clearly states that exporters can still apply for tax refunds through agents,but they must meet three conditions:

• Exportenterprisesmustcompletetheformalitiesfor(Note:Specifichandlingitemsarehiddenhere,andtheagencycompanyneedstoprovideoperationalguidance.)
• Thegoodshaveactuallyleftthecountryandobtainedthecustoms-issuedSingle
• Theagencycompanyhasthequalificationofageneraltaxpayer.

Special reminder: The customs declaration form filling requirements updated by the General Administration of Customs in 2024(Note: The specific terms for the year need to be provided by the agency here.),directly affecting the legality of the tax refund documents.

III.Differences in Tax Treatment Under Different Agency Models

• Buyoutagency(exportinthenameofself-operation)

Tax characteristics:

• Theagencycompany,asthesellerinthelegalsense,
• AspecialVATinvoiceneedstobeissuedtothecustomer.
• Thetaxrefundfundsarecollectedbytheagencycompanyaccount.

IV.Three Major Tax Risks Businesses Must Be Aware Of

• DocumentManagementRisk

In 2015,tax authorities in many regions investigated and dealt with a number of cases,which showed that 46% of the disputes over export tax rebates originated from(Note: The specific risk case examples need to be supplemented by the agency here.)

V.How to Verify the Tax Compliance of an Agency Company?

It is recommended that the client request the agency to provide:

• TaxCreditRatingCertificateforthePastThreeYears(MustbeatLevelBorAbove)
• CopyoftheCustomsAEOCertification.
• ExportTaxRebateAccountCustodianBankQualificationDocuments
• RecentQuarterlyVATReturn(Desensitized)

(Note: This article is written based on current tax laws and regulations.For specific operations,please refer to the interpretation of the competent tax authorities.It is recommended that foreign trade enterprises sign a "Tax Compliance Commitment Letter" with their agents to clarify the rights and obligations of both parties.)