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Can export tax refund be applied for when the export transaction term is EXW? What are the core requirements to be met?
or complex compliance issues.
clearance and fund security.
I am the head of a foreign trade enterprise in Shanghai specializing in hardware accessories export. Last week, I finalized a 120,000-euro EXW order with a German customer, and the goods have been delivered to the domestic warehouse designated by the customer.
Yesterday, the finance team reported to me that export tax refund may not be available for EXW transactions, and I was immediately thrown into a panic -- the profit margin of this order is already very thin, and if the tax refund cannot be obtained, it means a direct loss of more than 100,000 CNY. I heard from peers before that there are many pitfalls in EXW tax refund handling.
I am afraid that falling into these pitfalls will not only lead to failed tax refund, but also trigger compliance issues. I would like to ask whether tax refund is available for EXW exports at all? What conditions need to be met? What are the mandatory points for attention in the operation process?
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
First of all，strict pre-audit of pre-requisite documents must be completed: focus on reviewing three types of documents: title transfer certificates，consistency between the operating unit indicated on the customs declaration form and the manufacturing enterprise，and foreign exchange receipt slips. For title transfer，the pickup confirmation letter from the customer-designated freight forwarder or signed warehouse receipt must be provided. The header of the customs declaration form must be consistent with the tax refund applicant. The foreign exchange receipt slip must clearly indicate the contract number of the corresponding EXW order.
The division of responsibilities must be clarified for the connection of core nodes: under EXW terms，enterprises must ensure that the customs declaration subject is the enterprise itself (or an entrusted compliant foreign trade agent)，accurately mark "EXW" in the "transaction term" column of the customs declaration form，and simultaneously indicate the freight forwarder information and title transfer time in the remark column. The feedback time limit of customs declaration information shall be confirmed with the freight forwarder in advance to avoid overdue tax refund declaration caused by delayed customs declaration.
Contingency plans for abnormal situations shall cover two core scenarios: if the header of the customs declaration form is inconsistent，an application for deleting the original declaration and re-declaring shall be submitted within 3 working days，and a title transfer explanation shall be supplemented，if the foreign exchange receipt is delayed beyond the tax refund declaration deadline，an application for delayed declaration shall be submitted to the tax authority in advance，along with the customer's deferred payment guarantee.
For the final implementation of compliance，document filing must be completed: after the tax refund is received，documents such as contracts，pickup confirmation letters，customs declaration forms，and foreign exchange receipt slips shall be retained for more than 5 years to meet the follow-up verification requirements of the tax authority.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
When declaring customs under EXW terms, it is necessary to strictly ensure that "EXW" is accurately filled in the "transaction term" column of the customs declaration form, and at the same time indicate details such as operation fees charged by the freight forwarder in the "miscellaneous expenses" column, so as to avoid customs declaration delay caused by price review objections, which will further affect the tax refund declaration. In case of price review questions from customs, supporting documents such as title transfer certificates and customer payment receipts shall be submitted immediately to prove the authenticity of the transaction price.
In addition, the operating unit indicated on the customs declaration form must be consistent with the tax refund applicant. If agent customs declaration is entrusted, a formal agent customs declaration agreement shall be provided, which clearly indicates that the tax refund application right belongs to the entrusting party, to avoid the tax refund application being rejected by the tax authority due to inconsistent subjects.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
Under EXW terms, enterprises shall obtain the official pickup confirmation letter from the customer-designated freight forwarder at the time of title transfer. The letter shall clearly indicate the bill of lading number of the goods, warehouse address, pickup time and the official seal of the freight forwarder, which is one of the core certificates to prove the actual export of the goods.
At the same time, the synchronization time limit of customs declaration information shall be agreed with the freight forwarder to ensure that the deviation between the export date on the customs declaration form and the title transfer date does not exceed 3 working days, so as to avoid being identified as non-actual export by the tax authority due to inconsistent dates. If the export date is overdue due to logistics delay, a logistics delay explanation and the delay certificate issued by the freight forwarder shall be submitted to the tax authority in advance to apply for extension of tax refund declaration.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
Under EXW terms, enterprises can optimize tax refund efficiency through reasonable tax structure planning. If the enterprise does not have import and export rights, it can entrust a compliant foreign trade agency company to declare customs with double headers to ensure the compliance of the tax refund subject.
At the same time, attention shall be paid to the applicability of the VAT deferral policy. In some regions, VAT deferral can be applied for goods exported under EXW terms to reduce capital tie-up costs.
In addition, the deviation between the foreign exchange receipt amount and the amount on the customs declaration form shall be controlled within 5%. If the deviation exceeds 5%, a price adjustment explanation from the customer shall be submitted to prove the rationality of the deviation, so as to avoid being identified as abnormal foreign exchange receipt by the tax authority.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
The foreign exchange receipt certificate for EXW exports must strictly correspond to the order contract number, and the foreign exchange receipt slip must clearly indicate the words "EXW + contract number". If multiple orders are settled with combined foreign exchange receipt, a split account explanation from the customer shall be provided to clarify the amount corresponding to each EXW order.
At the same time, the foreign exchange receipt account must be the compliant foreign exchange account of the enterprise, to avoid the tax refund application being rejected due to the use of personal account for foreign exchange receipt. In case of overdue foreign exchange receipt, an application for deferred foreign exchange receipt filing shall be submitted to the bank in advance, and the filing certificate shall be submitted to the tax authority as supplementary information for tax refund declaration to ensure the compliance of the tax refund process.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The EXW contract must clearly indicate the specific time, place and certificate requirements for title transfer, so as to avoid the failure to provide export certificates due to title disputes. The responsibilities of the customer-designated freight forwarder shall be specified in the contract to ensure that the freight forwarder provides customs declaration information and pickup confirmation letter in a timely manner.
If the freight forwarder fails to perform its obligations resulting in tax refund failure, its compensation liability shall be clearly defined. In addition, tax refund compliance clauses shall be added to the contract, clarifying that the customer shall cooperate to provide foreign exchange receipt certificates, price adjustment explanations and other required documents for tax refund. If the customer refuses to cooperate, the enterprise can hold it liable for breach of contract according to the contract to reduce its own risk of capital loss.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The core verification point of EXW export tax refund is "consistency of four streams": contract stream, title stream, capital stream and invoice stream must be completely matched. During the audit, focus shall be placed on checking the authenticity of title transfer certificates, the consistency between the customs declaration form header and the contract subject, and the correspondence between the foreign exchange receipt slip and the invoice amount.
If the four streams are inconsistent, supplementary explanation documents shall be submitted within 3 working days to prove the authenticity and compliance of the transaction. In addition, all tax refund documents shall be retained for at least 5 years for follow-up verification by the tax authority. Missing documents may lead to the risk of tax refund recovery.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
In the supply chain planning for EXW transaction terms, the impact of tax refund shall be included in the cost actuarial model. If the tax refund conditions cannot be met, the quotation strategy shall be adjusted in advance, and the tax refund loss shall be included in the product quotation to avoid profit compression.
At the same time, the division of responsibilities for logistics and customs declaration can be optimized, and agency companies with tax refund qualifications can be entrusted to handle customs declaration and tax refund operations, so as to reduce their own compliance risks. In addition, it is necessary to regularly review the tax refund success rate of EXW orders, optimize the division of responsibilities at supply chain nodes for high-frequency problems, improve the overall tax refund efficiency and reduce capital tie-up costs.