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Export Tax Rebate Agency Freight, Who Pays?
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We have a batch of FOB export goods, but the freight forwarder charged us an 'agent freight fee'. The client said they only paid for the actual freight costs.The freight forwarder is constantly urging us to pay, but the factory's finance department says to wait until the tax refund comes in. Who should actually pay this money now? The contract only mentions FOB Shanghai, with no mention of this fee. Could this affect our tax refund?
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The core of this issue lies in the consistency between trade terms and customs declarations. Firstly，the term "agent's freight charges" itself is very vague，and the freight forwarder needs to itemize the specific charges. If the contract is under FOB terms，as the seller，paying the international freight charges not only violates regulations but also affects the basis for tax refund calculation. Customs and tax authorities only recognize the transaction method on the customs declaration - FOB price excludes freight charges. If you have paid the freight charges but declared FOB on the customs declaration，this constitutes "price misrepresentation"，which may result in tax refund rejection at the very least，and even involve tax evasion risks at the worst. My suggestions are as follows。
1. Immediately request the freight forwarder to provide a detailed breakdown of charges，distinguishing between local handling fees and international freight charges。
2. Check the transaction method on the customs declaration，which must be consistent with the actual party responsible for the charges。
3. Add a clause to the contract，stipulating that "except for the charges listed on the customs declaration，the seller shall not bear any overseas freight charges"。
The tax refund payment cycle and freight payment are two separate matters and should not be conflated.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
From a logistics perspective, "agent freight charges" typically refer to the local fees charged by freight forwarders at the port of departure, rather than the actual ocean freight costs. You need to first ask the freight forwarder to break down the quote into its components: booking fees, documentation fees, operational fees, etc. These are the seller's responsibilities, while the ocean freight charge depends on the trade terms. For FOB terms, the buyer appoints and pays the freight forwarder, and you only need to cover the local RMB fees. Currently, the fees being stuck likely mean that the freight forwarder has also charged you the ocean freight payable to the shipping company. Practical suggestions:
1. Require the freight forwarder to provide an invoice with the shipping company's header. If it's addressed to the buyer, you have the right to refuse payment.
2. If you have indeed advanced the freight charges, retain the bill of lading and invoice. You can seek reimbursement from the client after tax refunds, but this requires a "reimbursement clause for advanced freight charges" to be specified in the contract.
3. Next time, confirm before booking whether the freight charges will be "collect on delivery" (Freight Collect) or "prepaid" (Freight Prepaid) to avoid disputes afterward.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
This situation is quite common in negotiations. The key is to avoid making clients feel that you're evading responsibility, but rather to demonstrate professionalism. Here's a suggested approach: "Mr. Wang, regarding the agency freight fees, we've checked that according to FOB terms, the international freight should be borne by your company. However, since the freight forwarder has already provided a unified quote, to avoid delaying the shipment schedule, we'll advance the payment first and then deduct it from the payment or next order. What do you think?" This approach maintains principles while giving clients a face-saving solution.
In business negotiations, you could propose the following solutions:
1. Establish a "joint freight account" and deduct funds from tax refunds specifically for this purpose;
2. Convert the freight fees into "service compensation," such as promising an equivalent discount on the next order;
3. Most importantly, add a "dispute resolution clause" to future contracts: Any miscellaneous fees not covered by trade terms shall be borne by the actual beneficiary. If advance payments are made, the advancing party reserves the right to charge an annualized 8% funding cost fee.
Remember, this concession aims to establish trust through "act first, account later," but it's crucial to ensure clients clearly recognize your efforts.