You think finding an export agent will save you the hassle of issuing invoices?However,90% of factories lay the groundwork for tax rebate rejections right from their first invoice.Many business owners mistakenly believe that "agency" means they only need to hand over the goods to the logistics company,leaving all the documentation to the agent.This is a huge mistake.From a tax perspective,export agency essentially means that "the principal sells the goods to the agent company".If you fail to issue a compliant VAT special invoice to the agent company,the entire tax rebate chain will break down at the first link.A single mistake in the invoice could result in a six-month wait for the tax rebate,or even face tax inspections.

Why are the invoices for export through an agent more sensitive than those for self-operated exports?

Under the self-operated export model,you export directly,and the invoice is mainly used for internal cost accounting.However,under the agency export model,this invoice serves as the "input voucher" for the agent company to apply for tax rebates from the tax bureau.The Golden Tax IV system of the tax bureau will automatically compare the product names,quantities,and units on the "declaration form" with those on the "special VAT invoice".Any slight discrepancy in logic will trigger a system alert,resulting in a tax rebate adjustment notice.

SOP for issuing agency export invoices: Ensure no delay in tax refund

In order to avoid the aforementioned risks,please ensure that the Finance and Documentation Department strictly implement the following Standard Operating Procedures (SOPs).

Step 1: Obtain and verify the information of the agency agreement

Output:

Before issuing an invoice,it is necessary to obtain the invoicing materials provided by the agency.Do not use outdated materials,as the agency may have relocated its tax number or changed its name.

• CoreAction:Requesttheagencycompany’sInvoiceInformationForm(Name,TaxID,Address,Phone,BankNameandAccount).
• VerificationPoints:Confirmthe"Principal"and"Agent"intheagreementmatchtheinvoiceflow.

Step 2: Forcefully match the customs declaration data

Output:

This is the most likely to go wrong part.The invoice data must be based on the pre-entry form or the official customs declaration form,rather than the out-of-stock form.

• ProductNameMatching:Thenameofthegoodsontheinvoiceshouldbeconsistentwiththedeclaredproductnameonthecustomsdeclaration(orincludethekeywordsoftheproductnameonthecustomsdeclaration).
• UnitMatching:Ifthedeclarationunitonthecustomsdeclarationformis"kilograms"(KG),theinvoicemustnotstate"PCS"(pieces),unlessthereisacorrespondinglegalconversionrelationshipbetweenthetwounitsonthecustomsdeclarationform.
• AmountLogic:Theinvoiceamount(excludingtax)shouldbelessthanorequaltotheFOBamountonthecustomsdeclaration(itisusuallyrecommendedtoleaveamarginof1%to3%fortheagent’sfee,astheagentcompanyneedstoearnaprofitorcollectfees).

Step 3: Fill in the "Deadline" in the Remarks column

Output:

The remarks column is a key piece of evidence to prove the authenticity of the "export agency" business.

• Fillingintheformaccordingtothestandardrequirements:Note"AgencyExportAgreementNo.:XXXXX"andSerialnumber:XXXXX".
• ExpertTips:Ifitisabatchexport,itisrecommendedtoindicate"BatchexportNo.X/X".

Step 4: Time limit for issuing and delivering invoices

Output:

The invoice process doesn’t end after it’s issued; timeliness is of utmost importance.

• InvoicingDeadline:Itshallbeissuedwithinthetaxdeclarationperiodfollowingthedateofcustomsdeclarationforexport(basedontheexportdateonthecustomsdeclarationform).
• Passingactions:Afterissuingtheinvoice,pleasesendittousimmediately.TaxdeductionvoucherSendittotheagencyandkeeptheexpressdeliveryreceipt.Theagencyneedstosubmitthecertificationdeclarationwithin360daysaftertheinvoiceisissued.

Invisible Minefield: Exchange Rate Differences and the Threshold of "Deemed as Domestic Sales"

Many experienced professionals only focus on how to issue invoices,but neglect the logic of converting the invoice amount into the customs declaration amount based on the exchange rate.There is an "invisible red line" in this industry that only insiders are aware of:Exchange Cost.

If the RMB amount on the invoice is too low (resulting in excessive exchange rate costs) or too high (exceeding the amount on the customs declaration),the tax bureau system will determine the transaction as "abnormal".Especially when the invoice amount exceeds the amount on the customs declaration,not only the excess portion cannot be refunded,but it may also be suspected of "fraudulently issuing VAT invoices" or "tax evasion".

In addition,you must be vigilant about the "deemed domestic sales" clause.According to the regulations,if the exported goods are not declared for tax refund within the prescribed time limit,or the invoice is issued in an irregular manner resulting in the inability to obtain a tax refund,the transaction will be forcibly converted to "domestic sales" by the tax bureau,and you will need to pay an additional 13% value-added tax and late payment penalties.This is an irreversible loss.

Immediate Action List

After reading this article,please immediately check the proxy export orders you are currently handling:

• CheckInvoiceTemplate:HastheFinanceDepartmentalreadysetthefullnameoftheagencyasthedefaultcustomer?Doesitrequireuserstofillintheremarkscolumn?
• Checktheordersintransit:Identifytheordersthathavebeendeclaredthismonthbutnotinvoiced,andimmediatelychecktheunitsofmeasurementonthecustomsdeclarationformstoavoiddiscrepanciesintheunits.
• ConfirmAgencyFeeDifference:Confirmwiththeagencywhethertheinvoiceamountisequaltothedeclaredcustomsvalueminustheagencyfee.Ifso,pleaseensurethatthereareclearclausessupportingthisinthecontract.
• Establishanearlywarningmechanism:Setacalendarreminderforthe"exportdateofthecustomsdeclaration"toensurethattheinvoicingiscompletedbeforethenextmonth’staxdeclarationperiod.