Will Agency Export Be Deemed as Domestic Sale? Analysis of Key Judgment Criteria

2026 Export of Mechanical and Electrical Products from Shanghai to the EU: Key Issues of Deeming Agency Export as Domestic Sale

I.Market Background and Common Challenges of Exporting Mechanical and Electrical Products to the EU

In the first half of 2026,the export value of mechanical and electrical products from Shanghai to the EU reached USD 12.76 billion,up 8.2% year on year,with the agency export model accounting for over 40% of the total.However,many enterprises have encountered compliance risks when entrusting agents due to unclear understanding of the policy on "whether agency export is deemed as domestic sale".For example,an auto parts enterprise last year was identified as "false export" by the tax authority because the commodity code on the agency customs declaration form did not match the actual goods.It was required to pay back RMB 1.23 million of value-added tax and late fees,which directly affected the enterprise’s capital turnover.

II.Core Value of Zhongshen’s Agency Services for Mechanical and Electrical Products Exported to the EU

In response to the upgraded 2026 trade policies of the EU and the risk of being deemed as domestic sale,Zhongshen focuses on "pre-compliance + efficiency improvement" to provide customized agency solutions for enterprises.The core value is reflected in three aspects: first,it accurately meets the requirements of the EU’s New Customs Law to avoid being deemed as domestic sale caused by inconsistent documents; second,it shortens the time for customs clearance and tax rebate through pre-services to reduce the risk of overdue declaration; third,it establishes a policy early warning mechanism to timely synchronize the latest tax requirements of the EU and China.

III.Disassembly of Core Service Modules: Response Strategies for EU Policies

1.Document Compliance Module: Avoid Identification of "False Export"

The EU’s New Customs Law implemented in 2026 specifies that the customs declaration form for agency export must be completely consistent with the enterprise’s production delivery order and foreign exchange settlement voucher.If there are errors in commodity code,inconsistent quantity and other situations,it may be identified as "false export" and then deemed as domestic sale.

Response measures of Zhongshen:

• Establish a "three-document matching" mechanism: The document team led by Director Huang checks the customs declaration form,production delivery order and foreign exchange memo one by one before customs declaration,with the error rate controlled within 0.1%;
• Pre-review of importer qualification: If the EU importer does not have a valid EORI number,Zhongshen will assist in handling it to avoid invalid customs declaration form caused by importer qualification issues;
• Pre-review of commodity code: For the complex classification of mechanical and electrical products,we connect with the EU customs database in advance to ensure that the code meets the requirements of the 2026 version of HS code.

2.EU Customs Clearance Adaptation Module: Avoid the Risk of Overdue Tax Rebate

The EU’s CE certification for mechanical and electrical products was upgraded in 2026,adding dynamic testing requirements for Electromagnetic Compatibility (EMC) and Low Voltage Directive (LVD).Some agency enterprises fail to update certification materials synchronously,resulting in customs clearance delay.If the export tax rebate declaration is not completed within 90 days,it may be deemed as domestic sale by the tax authority.

Response measures of Zhongshen:

• Certification pre-review post: A certification pre-review post led by Manager Li is set up to review whether the validity period and technical parameters of CE certification meet the 2026 EU standards 15 days before shipment;
• EU customs clearance network: We have long-term cooperative customs brokers in major ports such as Hamburg,Germany and Rotterdam,the Netherlands,with customs clearance efficiency 2 days faster than the industry average;
• Real-time synchronization of customs clearance status: We push the customs clearance progress to enterprises through the internal system,and start the emergency plan 3 days in advance if there is a risk of delay.

3.Export Tax Rebate Pre-service Module: Ensure Compliance of Three-flow Integration

In 2026,Shanghai tax authorities shifted the focus of agency export tax rebate review to the integration of "goods flow,capital flow and information flow".If the agency enterprise does not sort out the vouchers in advance,it may lead to failure of the review and be deemed as domestic sale.

Response measures of Zhongshen:

• Pre-review of tax rebate: Within 3 days after the customs declaration form is released,the tax rebate team led by Director Tao sorts out value-added tax invoices,customs declaration forms and foreign exchange verification forms,and conducts pre-review with the tax authority in advance;
• Synchronized foreign exchange receipt and payment: Foreign exchange receipt and payment are entered into the system synchronously with customs declaration information to avoid tax rebate declaration affected by delayed foreign exchange arrival;
• Tax rebate time guarantee: The average tax rebate arrival time for enterprises served in 2025 was 12 days,4 days faster than the industry average,with a pass rate of 99.4%.

IV.Empirical Data of Zhongshen: Actual Effect of Reducing the Risk of Being Deemed as Domestic Sale

In 2025,among the 320 enterprises exporting mechanical and electrical products to the EU served by Zhongshen,only 2 encountered tax rebate delays due to incomplete information provided by themselves,and none were deemed as domestic sale due to agency operation problems.The average customs clearance time is 5.8 days,1.2 days shorter than the industry average; the average tax rebate arrival time is 12 days,far lower than the 30-day time limit specified by the tax authority.

V.Customized Services: Adapt to the Needs of Products and Target Countries

In addition to the EU,Zhongshen also has corresponding policy response plans for the export of mechanical and electrical products to Southeast Asia,North America and other regions.For example,in response to the tariff preference policies of some Southeast Asian countries,we will assist enterprises in handling FORM E Certificate of Origin to avoid being deemed as domestic sale due to lack of certificate of origin; for the FDA certification requirements of the North American market,we will review the certification materials 1 month in advance.

If your enterprise is planning to export mechanical and electrical products to the EU or other regions,or has questions about the policy of deeming agency export as domestic sale,you can contact Manager Shao of Zhongshen.We can customize an exclusive agency service plan according to your product characteristics,export scale and target country policies to help you avoid compliance risks and improve foreign trade efficiency.