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What are the conditions for duty-free import and export through an agent?
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We are a trading company. Recently, a client entrusted us to import a batch of equipment on their behalf. I heard that the client wants to transfer the ownership of the equipment to us after it arrives in China.Under certain conditions, businesses can enjoy tax exemptions, but what specific requirements must be met? The most worrying thing is that improper operations may be identified by customs as a buying-selling relationship, leading to tax supplementation and fines. What are the core conditions for tax-free import and export agency services? How can risks be avoided in actual operations?
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
The core condition for tax-free import and export agency services is that you must prove that "the ownership of the goods always belongs to the principal". Customs focuses on checking three points。
1. Whether the agency agreement clearly defines a pure agency relationship and whether the agency fees are fixed。
2. Whether the fund flow shows that the principal directly pays the overseas supplier。
3. Whether the document flow is consistent，and the consumption unit on the customs declaration must be the principal。
Declaration errors in HS codes and forged regulatory documents will result in the loss of tax-free eligibility. The risks include: If identified as a "substantive sale"，the principal will be required to pay back taxes，penalties，and a fine of no more than 30% of the goods value。
Suggestions: Retain payment receipts and email instructions from the principal，and issue separate invoices for agency fees to avoid confusion。
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
The key to logistics is the declaration of customs declaration forms and document matching. The supervision mode must be selected as "Agent Import and Export" (9910), rather than general trade. The bill of lading consignee should be listed as the consignor, with you acting as the notifying party. Use EXW in Incoterms, allowing the consignor to bear overseas expenses. Before customs clearance, submit the "Confirmation Letter for Agent Imported Goods" and the consignor's "Record of Importers and Exporters" to the customs. For goods subject to inspection and quarantine, the consignor must obtain the "Customs Clearance Permit for Imported Goods". In terms of costs, the agency fee should be invoiced separately and not mixed with the payment for the goods. Regarding time efficiency, prepare all required documents three days in advance to avoid being subject to controlled inspection due to document discrepancies.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Business negotiations require transforming tax-free conditions into win-win language. Tell clients: "To help you comply with tax-free regulations, you need to directly pay foreign exchange and provide qualification certificates. We only charge an agency fee." Specify in the contract: "Pure agency service, no responsibility for goods price risks, agency fee X%." Payment method: Have clients pay foreign exchange to suppliers, while you only collect RMB agency fees to avoid funds flowing through your account. Add a disclaimer clause: "If the client fails to provide proper documents and thus cannot obtain tax exemptions, we shall not bear any responsibility." Provide a "List of Import Agency Materials" for clients to prepare, which demonstrates professionalism while clearly defining responsibilities. By adopting this approach, clients will perceive you as professional and reliable, while shifting tax risks to the client side.