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How much tax rebate can I get for the FOB price of the goods from Nanjing? (Reposted)
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Our company is located in Nanjing, and our factory is in Jiangsu. Recently, I heard from a colleague that when declaring customs, if we report the FOB price as FOB Nanjing instead of FOB Shanghai, we can get a larger tax refund. Is this true? How can we legally get a higher tax refund by doing this?
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The choice of FOB Nanjing or FOB Shanghai has no direct impact on the tax refund amount. The core calculation formula for the tax refund amount is: Tax Refund Amount = FOB USD Price × Exchange Rate × Tax Refund Rate. Customs and tax authorities recognize the final FOB price and the tax refund rate corresponding to the HS code，not the city name. What you need to be aware of is compliance risks。
First，the term "FOB Nanjing" itself is not standard. The FOB clause must specify the actual port of loading (e.g。Shanghai，Ningbo). If Nanjing is not the port of loading，listing FOB Nanjing on documents may be considered a misuse of trade terms and could lead to non-compliance with customs regulations。
Second，if you artificially split the price to "maximize tax refunds," such as listing domestic freight separately and attempting to lower the FOB price，this constitutes false price declaration. Customs will closely scrutinize freight invoices，payment documents，and whether the price matches reality during inspections. Once identified as under-declaring prices or misusing trade terms，not only will you need to pay back taxes but may also face fines and damage to your corporate credit rating。
The correct approach is: The FOB price must genuinely include all costs incurred before the goods reach the port of loading. Whether you ship from Nanjing or Shanghai，as long as the final FOB price is accurate and documentation is complete，the tax refund calculation will yield the same result. Focus on ensuring factories issue full VAT invoices and comply with regulatory reporting requirements rather than obsessing over port names.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
From a logistics practical perspective, the essence of your question is not about tax rebates, but rather who should bear the inland freight costs and how to include them in the cost calculation. The inland freight fee from Nanjing to Shanghai Port is approximately ￥1,200–1,800 per container. This cost objectively exists regardless of how it is reported. If you declare FOB Shanghai, this inland freight will be included in the total FOB price you quote to clients, and the tax rebate base will include the freight cost. If you attempt to declare "FOB Nanjing," in practice, the goods must still be transported to Shanghai Port for loading onto ships. Either you will bear the freight cost (increasing your costs) or require clients to pay separately (which they may not agree to). However, regardless of the approach, the FOB price declared to customs must reflect the total value of the goods when they are loaded onto ships in Shanghai Port, and the invoice for freight, customs declaration forms, and bill of lading information must be consistent across all three documents.
Here's an optimal cost solution: Declare FOB Shanghai directly and explicitly include the inland freight fee from Nanjing to Shanghai in your quote. This clarifies the tax rebate base and ensures clients understand the situation. To reduce costs, you could sign long-term agreements with freight forwarders to lower inland freight rates or consolidate shipments via rail to ports, but this changes the cost structure of the FOB price rather than the tax rebate calculation rules. Remember, the amount of tax rebate depends solely on the final FOB price and the tax rebate rate, not on the city where the goods are shipped from.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The claim you've heard is a typical case of "hearsay and misinformation" in the foreign trade industry. Let me summarize the conclusion directly: Making a fuss over port names won't help you get higher tax rebates, and it might even make clients perceive you as unprofessional. From a business negotiation perspective, here's how you should proceed:
First, always quote standard FOB terms with the actual port of loading (e.g., FOB Shanghai) to clients. This follows international practice and demonstrates your professionalism and reliability.
Second, the amount of tax rebates is a financial matter for your company and should not be used as a bargaining chip in negotiations. Your focus should be on legally maximizing profits through supply chain optimization:
- Negotiate with factories to obtain full VAT invoices (13%) to ensure accurate HS code classification (some products may qualify for higher rebate rates).
- If clients ask why you report FOB Shanghai despite shipping from Nanjing, explain: "Our goods are consolidated from Nanjing factories to Shanghai port for loading, and the inland freight costs are already included in the FOB price for maximum logistics efficiency."
Be transparent and concise to build trust. Never tell clients or factories, "We list FOB Nanjing to get higher rebates," as this could damage your business reputation. Focus on optimizing real costs rather than playing word games with documents.