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Who Bears Various Domestic and International Freight Costs Involved in the Full Process of Agency Export Tax Refund?
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TRACKING NO. 20260429 / GLOBAL Zhongshen Trade · 23+ Years of Expert Trade Agency
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I am the person in charge of a small electromechanical manufacturing enterprise in Shanghai. I just signed an agency export tax refund agreement with Zhongshen last month. Recently, the first batch of goods was shipped to the EU. During docking, I found there are multiple types of freight costs including domestic trailer fees, port customs declaration fees, ocean freight and destination port customs clearance fees. The agreement only generally mentions that "relevant fees are settled based on actual occurrence", without specifying which party shall bear which part. Now the freight forwarder is urging me to pay the ocean freight, while Zhongshen says this part may be borne by them or the foreign buyer according to industry practice? I am extremely anxious now. If I make a wrong payment, I will not only waste money for no reason, but also worry about affecting the subsequent tax refund declaration, and even trigger agreement disputes. I would like to ask who on earth should bear these freight costs?
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
Many foreign trade enterprises have common misunderstandings: they mistakenly assume that all freight costs for agency export tax refund are borne by the agency company or foreign buyers，or directly determine the responsibility only based on trade terms，ignoring the exclusive provisions of the agency agreement.
Confusing the party bearing freight costs will trigger a chain of negative reactions: the freight forwarder withholds goods due to unsettled fees leading to port detention，core tax refund documents such as manifests and customs declaration forms are submitted with delay，which further triggers correspondence verification by tax authorities，even leads to direct rejection of tax refund applications due to inconsistent documents，and may also affect the export credit rating of enterprises，restricting subsequent subsidy applications and financing.
Physical risk isolation measures: first split the freight into three categories: domestic trailer/customs declaration fees，international sea/air freight，and destination port customs clearance fees，and match them respectively with trade terms (for example，foreign buyers bear international freight under FOB terms) and agency agreement clauses one by one.
Exclusive loss-stopping tip: Immediately sign a supplementary agreement annex with the agency company to clarify the responsible party and payment time limit for each type of freight，and retain all freight invoices and payment vouchers to ensure consistency with the document chain for tax refund declaration，so as to avoid compliance risks caused by missing vouchers.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Freight related to customs declaration involved in agency export tax refund (such as customs declaration entry fees, manifest transmission fees, local customs declaration and transshipment fees) shall be determined in combination with the customs declaration entrustment agreement: if the customs declaration entrustment signed by the agency company and the enterprise is "all-inclusive price", such fees are included in the agency service fee and borne by the agency; if it is "reimbursement for actual expenses", it shall be paid directly by the enterprise to the customs broker, and the invoice title shall be consistent with the tax refund subject to avoid affecting the tax refund document review due to inconsistent invoice subjects. At the same time, the amendment freight caused by wrong customs declaration data shall be borne by the at-fault party. If the fault is not clearly defined, it shall be settled through negotiation in accordance with the provisions on responsibility division in the Customs Declaration Service Specification, so as to ensure that the customs declaration documents fully match the tax refund declaration data.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The bearing of international sea/air freight in agency export tax refund is mainly based on trade terms: under FOB terms, foreign buyers bear the international freight after the port of shipment and destination port fees; under CIF terms, the enterprise shall bear the sea freight and insurance premium from the port of shipment to the destination port, and the agency company is only responsible for advancing or paying on behalf, and the repayment time limit and exchange rate settlement method for the payment on behalf shall be clearly specified in the agency agreement. If additional reallocation freight is incurred due to container rolling or space shortage during peak season, the responsibility shall be distinguished: if it is caused by the freight forwarder's booking error, it shall be borne by the freight forwarder; if it is caused by the enterprise's delayed delivery, it shall be borne by the enterprise, and the manifest information shall be updated in time to avoid affecting the tax refund review due to inconsistency between the manifest and the customs declaration form.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
The party bearing freight in agency export tax refund directly affects the tax cost: if the enterprise bears the domestic freight, the obtained special VAT invoice can be used for input tax deduction, and it is necessary to ensure that the invoice item is "transportation service * freight", and the remark column indicates the place of departure, place of arrival, vehicle type and number, and transported goods information; if it is borne by the agency company, the freight shall be included in the agency service fee to issue a unified invoice, and the enterprise can list the agency service fee invoice as cost expenditure. In addition, if the VAT deferral mode is selected, the destination port import VAT can be paid by the foreign buyer on a deferred basis, without the need for the enterprise to advance in advance. This clause shall be clearly specified in the agency agreement to reduce the capital occupation cost of the enterprise, and at the same time ensure that all freight vouchers meet the tax refund review requirements of the tax authority.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The payment of freight in agency export tax refund shall comply with the compliance requirements for cross-border foreign exchange receipt and payment: if the enterprise pays the international freight, it shall carry out directory registration through the Foreign Exchange Monitoring System for Goods Trade, to ensure that the payment amount is consistent with the freight column data on the customs declaration form, so as to avoid verification by the foreign exchange administration due to inconsistency between the foreign exchange receipt and payment amount and the customs declaration data; if the agency company pays on behalf, the authorization scope of the payment on behalf shall be clearly specified in the agency agreement, and the agency company shall retain the bank slip of the payment on behalf, freight forwarder invoice and other vouchers for compliance verification by the foreign exchange administration. In addition, if RMB cross-border payment (CIPS) is used, it is necessary to ensure a clear payment path and complete voucher chain, so as to avoid affecting the compliance of tax refund declaration due to non-compliant foreign exchange receipt and payment.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
If the agency export tax refund agreement does not clearly stipulate the party bearing the freight, it shall be determined in accordance with the provisions on entrustment contracts in the Civil Code: as the trustee, the agency company only handles affairs within the authorization scope of the principal (enterprise), therefore, necessary expenses such as domestic trailer and customs declaration fees shall be borne by the enterprise if there is no agreement; the international freight shall be determined in accordance with the international practice of trade terms (INCOTERMS 2020), for example, it is borne by the buyer (foreign buyer) under FOB terms. If a dispute arises from freight bearing, all communication records, documents and payment vouchers shall be retained as evidence. If negotiation fails, it can be resolved through arbitration or litigation. At the same time, it is necessary to ensure that the timely submission of tax refund documents is not affected during the dispute handling process, so as to avoid tax refund losses caused by overdue declaration.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
Freight incurred due to on-site customs inspection in agency export tax refund (such as container unpacking fees, shifting fees, inspection fees) shall be borne by the party distinguished according to the inspection reason: if the inspection is caused by the enterprise's false declaration or inconsistent documents, the relevant fees shall be borne by the enterprise; if the inspection is caused by random customs spot check or system early warning, such fees belong to necessary expenses in the customs declaration link. If the agency agreement includes "all-inclusive customs declaration service", it shall be borne by the agency company, otherwise the enterprise shall pay for the actual expenses. In addition, it is necessary to ensure that the title of the inspection fee invoice is consistent with the tax refund subject, and retain the inspection notice, unpacking photos and other vouchers for tax refund review by the tax authority, so as to avoid correspondence verification caused by missing vouchers.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
The division of the party bearing freight in agency export tax refund shall be completely consistent with the tax refund document chain: if the enterprise bears the freight, it shall obtain a special VAT invoice or ordinary invoice titled under the enterprise, and the invoice amount shall match the freight column data on the customs declaration form; if the agency company bears the freight, the freight shall be included in the invoice details of the agency service fee, or obtain a freight invoice titled under the agency company, and then pass on the cost to the enterprise through the agency agreement. During export tax refund audit, the tax authority will focus on verifying the "four-stream consistency" (contract stream, capital stream, invoice stream, goods stream), so it is necessary to retain all freight payment vouchers, agency agreements, customs declaration forms and other documents to ensure the correspondence of the four streams, so as to avoid the tax refund declaration being rejected due to inconsistent documents.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
The division of the party bearing freight in agency export tax refund can be combined with supply chain cost optimization strategies: if the enterprise has tight cash flow, it can negotiate with the agency company to advance the international freight, and reduce the capital occupation cost by extending the payment period; if the enterprise enjoys the tax difference advantage of export tax refund, it can choose to bear the domestic freight to deduct the input tax and reduce the overall tax cost. In addition, through integrating logistics resources, the all-inclusive price service of freight forwarders can be selected to uniformly package domestic and international freight, clarify the responsible party, avoid responsibility disputes caused by cost splitting, optimize the cost structure of the supply chain, improve the overall operation efficiency, and ensure the smooth implementation of the tax refund process.