In international trade,the EXW (Ex Works) clause has long been the preferred choice for many enterprises,especially among new and existing clients who favor this method.Simply handing over the goods to the freight forwarder completes the process,making operations simple and efficient.However,recent policy adjustments have brought about minor changes in EXW declarations,particularly regarding the requirement to display miscellaneous fees on customs declarations.Previously,failing to fill in the miscellaneous fees section could still complete the process smoothly,but now this is mandatory.However,this may lead to data mismatches during tax refunds,causing confusion.Today,let’s discuss this topic and share some practical operational experiences to help you handle declarations and tax refunds more smoothly under the EXW clause.

The "new normal" of declaring miscellaneous fees under EXW terms

Under EXW terms,customers usually arrange for logistics companies to pick up the goods at their premises,and all domestic costs are handled by the customer or the freight forwarder.Originally,the "miscellaneous fees" column on the customs declaration form was optional,but now it is mandatory to disclose it,including estimated freight charges,insurance premiums,and customs declaration fees.These costs are listed in the "miscellaneous fees" section of the customs declaration form to ensure a more complete declaration.

The problem lies here: after filling in the miscellaneous fees,the declared customs value will be higher than the actual foreign exchange income.This is because the EXW foreign exchange only includes the factory price of the goods,excluding these additional fees.When applying for tax refunds,the tax system requires consistent data,and any discrepancies will easily lead to delays.Many enterprises have reported that most of their new and existing customers are still using EXW,but this change has made the operation a bit awkward.

Common coping strategies

Don’t worry.In practice,there are many tips to help resolve this problem:

• EstimateandreportmiscellaneousexpensesThemiscellaneousfeescanbeestimatedbasedonthefreightandinsurancefeestotheportofdeparture.Forexample,whensendingaDHLpackageunderEXWterms,youcancheckthefreightratesonthecourier’sofficialwebsiteandconvertthemintoUSdollarsforentry.Inothercases,youcansimplyfillinthecustomsdeclarationfeeamount,whichwillalsohelpclearcustoms.Bydoingthis,yourdeclarationwillbecomplete,andyou’llatleasthaveabasisforclaimingtaxrefunds.
• ChangethereportingmethodtoFOBManycompaniessuggestnegotiatingFOBtermsdirectlywithclients.UnderFOB,miscellaneousfeesarenaturallyincludedinthedeclarationandwillnotresultinnon-compliance.However,iftheclientinsistsonEXW,youcancommunicatewiththefreightforwarderduringcustomsdeclarationandreportitasFOB(providedtherearenooperationalconflicts).Thiswillensureasmoothertaxrefundprocess.However,youneedtonotethatFOBrequiresprovidinginvoicesformiscellaneousfees,whicharenotavailableunderEXW,makingitimpossibletoapplyforataxrefundinthiscase.
• InternalcoordinationThedepartmentresponsiblefortaxrefundsinthecompanymaysuggestavoidingEXW,andthere’snocleardirectivefromhigherauthorities.Inthiscase,weshouldcommunicatemorewithclients,explainthepolicychanges,andstrivetogaintheirunderstanding.Ifthere’sreallynowaytochangeit,wecanfillinthemiscellaneousfeeswithestimatedvalues,andcommunicateinternallyduringthefinancialreconciliationprocess.

Potential Risks and Tips

Although EXW handling charges are stipulated,they are not actually included in the foreign exchange calculation.This may be questioned during tax refund audits.It is recommended to confirm the declaration details with the freight forwarder in advance to ensure consistent data logic.Policies are constantly changing.After the customs declaration system is updated,the handling charges column will automatically pop up a reminder.Don’t ignore it.

Want to save yourself the hassle?Consider the tax refund process from the start of negotiations and prioritize FOB terms.For small-scale shipments via express delivery under EXW terms,it’s manageable,but it’s better to adjust the arrangements for large-scale shipments.

Conclusion

Although EXW operations are convenient,the changes in miscellaneous fee declarations have added an extra layer of challenges to tax refunds.By making preliminary estimates or switching to FOB terms,companies can adapt flexibly.International trade is inherently volatile,and mastering these practical tips can help streamline the process.We hope these insights will provide you with some inspiration,enabling you to handle future declarations with greater ease and confidence!