What export type does processing trade actually belong to?

According to the latest version of the "Customs Processing Trade Management Measures" in 2025,agency processing belongs toProcessing tradeScope,distinct from general trade exports.Core characteristics include:

• Domesticenterprisesacceptingoverseascommissionsforprocessingwithsuppliedmaterials
• Ownershipofrawmaterialsalwaysremainswiththeoverseasconsignor
• Finishedproductsmustbe100%re-exported

How does Customs distinguish processing trade from general trade?

After the upgrade of the customs supervision system in 2025,the identification will mainly be based on the following three dimensions:

• Documentoftitle:Processingtraderequiressubmissionofbondedmaterialsfilinglist
• Fundflowdirection:Onlyprocessingfeesarecharged,excludingrawmaterialvalue
• Customsclearancemethod:Mustusespecialprocessingtrademanualfordeclaration

Does processing under commission require an export license?

Determined under two circumstances:

• Ifprocessedproductsfallundernon-restrictedcommodities:Noexportlicenserequired
• Ifinvolvingdual-useitems/militaryproductscatalogcommodities:
  • MustobtainProcessingTradeBusinessApprovalCertificate,
  • Submitend-userandend-usecertificates

How is VAT handled for processing trade?

According to the Ministry of Finance’s Announcement No.38 of 2025:

• Processingwithimportedmaterialsimplementsexemption,credit,andrefundpolicies
• ProcessingwithsuppliedmaterialsbasedonprocessingfeeamountTax-free
• DeepprocessingtransferrequiresspecialVATpaymentcertificate

What are the common compliance risks in contract processing?

Customs inspection cases from the past three years reveal the main risk points:

• Inaccuratedeclarationofmaterialconsumption(Accountedfor37.2%in2024)
• Irregulardisposalofleftovermaterials(Averagefine:280,000RMBpercase)
• Unauthorizeddomesticsalesofbondedgoods(Criminalcasefilingthreshold:goodsvalueof500,000RMB)

How to choose a processing trade cooperation model?

Recommendations based on actual enterprise conditions:

• ProcessingwithSuppliedMaterials:Suitablefornewlyestablishedsmallandmedium-sizedenterprises
• ProcessingwithImportedMaterials:Suitableforlargeenterpriseswithprocurementchannels
• Bondedmaintenance:Newpilotindustriestobeaddedin2025

What should be noted in processing trade manual verification?

In 2025,the General Administration of Customs will strengthen three types of inspections:

• Discrepancyratebetweenactualinventoryandsystemdata≤3%
• Productionlossratemustnotexceed20%ofregisteredvalue
• Finishedproductexportmustbecompletedbeforemanualexpiration

Contract processing can apply forAccording to Document No.38 of the State Administration of Foreign Exchange in 2025,

Key differences in tax refund eligibility conditions:

• ProcessingwithSuppliedMaterials:Onlyprocessingfeesaretax-exempt
• ProcessingwithImportedMaterials:CanrefundVATondomesticallypurchasedauxiliarymaterials
• Specialcircumstances:Requiresre-filingforprincipalchanges