In international trade,EXW (Ex Works)is a very common trade term.According to the EXW terms,the seller only needs to deliver the goods to the buyer at its location (such as a factory or warehouse),and all subsequent costs and risks are borne by the buyer.However,in actual operations,there may beEXW (without incidental expenses)andEXW (with incidental expenses)situations.These two forms have obvious differences in the filling of customs declaration forms and customs valuation.This article will deeply analyze the operation methods of these two types of EXW and their differences in customs operations.

Definitions of EXW (without incidental expenses) and EXW (with incidental expenses)

A.EXW (without incidental expenses)

Output:

• Definition:Theselleronlydeliversthegoodstothebuyeratitslocationanddoesnotassumeanyothercostsandresponsibilities.
• CostBearing:Thesellerdoesnotbearanyincidentalexpenses,suchasfees,loadingfees,inlandtransportationfees,etc.Alltheseexpensesarebornebythebuyerthemselves.

B.EXW (with incidental expenses)

Output:

• Definition:AlthoughtheEXWtermisadopted,thesellerpayssomeincidentalexpensesonbehalfofthebuyer,suchasexportcustomsdeclarationfees,loadingfees,inlandtransportationfees,etc.
• CostBearing:Theseincidentalexpensesareadvancedbythesellerandareusuallyreflectedinthepriceofthegoods.Eventually,theyarepaidbythebuyer.

Differences in Customs Declaration Forms

A.Declared Price and Expenses

Output:

• EXW(withoutincidentalexpenses)
  • DeclaredPrice:Onlyincludestheex-factorypriceofthegoodsanddoesnotincludeanyincidentalexpenses.
  • FillingofCustomsDeclarationForm:Onthecustomsdeclarationform,thetradetermshouldbefilledinas"EXW,"andthedeclaredvalueofthegoodsistheex-factoryprice.
• EXW (with incidental expenses)
  • DeclaredPrice:Includesthesumoftheex-factorypriceofthegoodsandtheincidentalexpensesadvancedbytheseller.
  • FillingofCustomsDeclarationForm:Onthecustomsdeclarationform,thetradetermshouldstillbefilledinas"EXW,"butthespecificadditionalfeeamountmustbeindicatedinthe"MiscellaneousFees"column.Thedeclaredvalueofthegoodsshouldbethetotalprice(ex-factoryprice+miscellaneousfees).

B.Customs Dutiable Value

Output:

• EXW(withoutincidentalexpenses)
  • DutiableValue:Thecustomsusuallytakesthedeclaredex-factorypriceasthedutiablevalue.
  • ImpactonTaxes:Duetotherelativelylowdutiablevalue,thetaxbasefortariffsandvalue-addedtaxesisalsorelativelylow.
• EXW (with incidental expenses)
  • DutiableValue:Thecustomswilltakethedeclaredtotalprice(includingincidentalexpenses)asthedutiablevalue.
  • ImpactonTaxes:Thedutiablevalueincreases,andthetaxbasefortariffsandvalue-addedtaxesalsoincreasesaccordingly.

C.Differences in Declaration Elements

Output:

• EXW(withoutincidentalexpenses)
  • TransactionMethod:EXW
  • Freight,InsurancePremium,IncidentalExpenses:Usuallyfilledas0orleftblank
  • ValueofGoods:Onlytheex-factorypriceofthegoods
• EXW (with incidental expenses)
  • TransactionMethod:EXW
  • Freight,InsurancePremium,IncidentalExpenses:Enterthespecificamountinthe"MiscellaneousFees"column.
  • ValueofGoods:Thesumoftheex-factorypriceandmiscellaneousfees

Customs Valuation and Tax Calculation

A.Customs Valuation Principles

Output:

According to the Measures for the Customs of the Peoples Republic of China to Determine the Dutiable Value of Goods,the customs shall determine the dutiable value based on the transaction value.The transaction value shall include the price of the goods and all expenses directly or indirectly paid by the buyer to obtain the goods.: Only the ex - factory price of the goods.

B.Differences in Tax Calculation

Output:

• EXW(withoutincidentalexpenses)
  • DutiableValue:Tariffs,VAT
  • :Calculatedbasedonalowerdutiablevalue,thetaxesandfeesarerelativelylow.:Ex-factoryprice+Miscellaneousfees.
• EXW (with incidental expenses)
  • DutiableValue:Calculatedbasedonahigherdutiablevalue,thetaxesandfeesincrease.
  • :Calculatedbasedonalowerdutiablevalue,thetaxesandfeesarerelativelylow.:IfdeclaredunderEXW(withoutmiscellaneousfees),butintheactualtransaction,theselleradvancesthemiscellaneousfeesandfailstodeclaretheminthecustomsdeclarationform,thecustomsmayconsiderthedeclaredpricetoolow,suspectingunder-reportingoftheprice,andmaythusrequirethepaymentofadditionaltaxesorconductapriceinvestigation.

C.Possible Adjustments by the Customs

Output:

Clarify Expenses

Practical Operational Suggestions

A.Declare Truthfully

Output:

• :Clarifythebearerandamountofeachexpenseinthetradecontract.:ConsistentDeclaration
• :Thedeclaredpriceonthecustomsdeclarationformshouldbeconsistentwiththetotalamountactuallypaid,includingthepriceofthegoodsandthemiscellaneousfeesadvancedbytheseller.:ExpenseVouchers

B.Provide Supporting Documents

Output:

• :Keepandproviderelevantinvoices,receipts,contractsandothersupportingmaterialsforcustomsinspection.:ContractExplanation
• :Listthecompositionofexpensesindetailinthetradecontract,especiallythemiscellaneousfeesadvancedbytheseller.:AvoidUnder-reporting

C.Avoid Risks

Output:

• :Preventcustomsdoubtscausedbytoolowdeclaredpricesandavoidriskssuchasadditionaltaxpaymentsandfines.:ProfessionalConsultation
• :Ifyouhaveanyquestions,consultaprofessionalcustomsbrokerorcustomsdepartmentinatimelymannertoensuretheaccuracyandcomplianceofthedeclaration.:Ininternationaltrade,therearesomedifferencesintheoperationdetailsofcustomsdeclarationandcustomsvaluationundertheEXWterm,especiallyintwocases.Inactualoperation,itisnecessarytodeclaretruthfully,clarifythebearerofeachexpense,andproviderelevantsupportingmaterialstoavoidunnecessaryrisksandtroubles.Throughprofessionaloperationsandrigorouscontractterms,youcanmoreeffectivelyensurethecomplianceandsmoothnessoftrade.

Summary

Impact of Customs Commodity Code Adjustment on Export Enterprises and Handling Methods EXW (without incidental expenses) and EXW (with incidental expenses) Requirements for the Declaration Time Limit of Import and Export Goods and Handling of Special Circumstances