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Who Gets the Tax Rebate After Agency Export? What is the Legal Basis?
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Our company exported a batch of goods through an agency, but now we are facing a tax refund issue. The agency said that the tax refund amount needs to be deposited into their account first, and after deducting the service fee, it will be transferred to us. However, I heard that the tax refund should belong to the client. So, who exactly should receive the tax refund? Is there any clear legal basis for this? If the agency withholds the tax refund, what should we do?
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
According to the provisions of the Announcement No. 24 of 2013 issued by the State Taxation Administration and other regulations，the export tax rebate shall be fully owned by the client，and the agency company has no right to withhold it. The legal basis is very clear: the right to tax rebate is based on the actual export behavior and the ownership of the input tax amount，which has no direct relationship with the name under which the declaration is made. You must clearly stipulate in the agency agreement that the tax rebate belongs to the client，and keep the invoices of value-added tax，customs declaration forms and other vouchers. If the agency company withholds the tax rebate without authorization，it is an illegal act，and you have the right to report it to the tax authorities.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
In practice, the tax refund will first be deposited into the agent's account, but it must be transferred to you immediately after it arrives. It is recommended to explicitly stipulate in the agency agreement that the transfer must be completed within three working days after the funds arrive, and to agree on default penalties for delays. The "Production and Sales Unit" on the customs declaration form must be filled out with your company's information, while the "Declaring Unit" should be the agent's company. The payment method should adopt the "separate settlement of agency fees and tax refunds" model: agency fees are charged at a fixed percentage of the invoice amount, and the tax refunds are fully returned. This approach is both compliant with regulations and helps avoid financial risks.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
When communicating with the agency, it is recommended to adopt the strategy of "first affirming the value of the cooperation and then clarifying the legal bottom line". You can say: "We highly appreciate your professional services, and we will pay the agency fees on time. However, according to the regulations of the State Taxation Administration, the tax refund belongs to our client. We hope that your agency can cooperate with us by transferring the funds promptly after they arrive, so that our future cooperation will be smoother." At the same time, add a clause in the contract: "Within X working days after the tax refund arrives, the agent shall transfer the full amount. For each day of delay, a penalty of 0.05% will be charged." This way, you can not only maintain the relationship but also protect your rights and interests.