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Which party, the buyer or the seller, shall bear the various itemized fees for import and export agency services handled within the scope of compliance?
or complex compliance issues.
clearance and fund security.
I am the head of a small and micro enterprise in Shanghai that has just started foreign trade business. Last month, I reached a clothing order with a European client for the first time, signed under FOB Shanghai terms, and entrusted Zhongshen as the import and export agent. Now the agent has provided me with a long list of fees, including customs declaration entry fee, commodity inspection and quarantine fee, manifest transmission fee and basic agency service fee, totaling nearly 20,000 yuan. I communicated with the foreign client, who said that under FOB terms, they are only responsible for sea freight and insurance, and all these agency-related fees shall be borne by me.
However, I had not expected these additional expenses at all before, and our company is already facing tight cash flow. These sudden fees are really worrying me, and I heard that failure to settle the fees in time may lead to port detention or even customs seizure of the goods. This is the first foreign trade order of our company, if it goes wrong, we will not only lose the principal, but also lose the client. I am very anxious now and want to figure out who should bear these various import and export agency fees?
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
First of all，we need to clarify the common industry misunderstanding: many small and medium-sized foreign trade enterprises only stipulate general framework trade terms such as FOB and CIF when signing contracts，without specifying various agency-related fees，leading to subsequent unclear rights and obligations and disputes，and even port detention and customs seizure triggered by fee arrears. This will not only incur thousands of yuan of additional port detention fees and container rental fees，but also may affect the enterprise's customs credit rating，resulting in enhanced supervision for subsequent customs declarations.
The core drawback of the traditional mode is that the agency fees are not bound with the liability boundaries of trade terms，leading to conflicting claims from the buyer and the seller. The optimization path can be carried out from two aspects: first，refine fee rights and obligations in written contracts，clearly attribute itemized agency fees such as customs declaration entry fee and commodity inspection and quarantine fee to the responsible party specified in the trade terms. For example，under FOB terms，the exporter usually bears the domestic agency customs clearance and port operation related fees，while the importer bears the foreign agency customs clearance fees，second，make use of the VAT deferral policy，eligible small and micro enterprises can apply for deferred payment of import value-added tax，eliminating the need to advance large amounts of tax in advance and improving cash flow efficiency.
In terms of access threshold，as long as the enterprise entrusts a compliant import and export agency company and the goods meet the customs supervision requirements，it can apply for VAT deferral. Dynamic calculation of revenue ratio: take ordinary goods with a value of 1 million yuan as an example，the deferred VAT payment is about 130,000 yuan，which can free up cash flow for at least 30 days，equivalent to saving nearly 1,000 yuan of short-term financing costs. Finally，it should be noted that all fee agreements must be confirmed in writing to avoid subsequent risks caused by oral commitments.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
From the perspective of customs valuation compliance, the party bearing the import and export agency fees shall match the identity of the "consignor and consignee" on the customs declaration form, and shall comply with the rules for customs determination of dutiable value. If the agency company only acts as the trustee for customs declaration, the fee bearer shall be consistent with the responsible party stipulated in the trade contract, and the party bearing the fee shall be clearly marked in the "remarks column" of the customs declaration form, to avoid the agency fee being included in the dutiable value of the goods during customs valuation, resulting in the enterprise having to pay additional high tariffs and value-added tax.
In case of valuation disputes, complete supporting materials such as trade contracts, fee payment vouchers and agency agreements shall be provided in time to prove that the agency fee is independently borne by the agreed party and has nothing to do with the transaction price of the goods. In addition, if the double-title customs declaration mode is adopted, the party bearing the agency fee shall be clearly agreed in writing in the agency agreement, to avoid unclear rights and obligations during subsequent customs verification, which may affect the enterprise's customs credit rating.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
From the perspective of international logistics operation, the party bearing the import and export agency fees shall be bound with the liability boundary of logistics terms. For example, under FOB terms, the exporter shall bear the domestic agency storage fee, trailer fee, customs declaration fee, etc., while the importer shall bear the foreign agency customs clearance fee, terminal sundry fees, etc.; under CIF terms, the exporter shall bear all agency and logistics fees up to the port of destination, and the importer shall only bear the pickup and delivery fees after the goods arrive at the port of destination.
In addition, in case of abnormal situations such as container rolling and space overbooking, the agency reallocation fee incurred shall be borne by the responsible party: if it is caused by the operation error of the agency company, it shall be borne by the agency company; if it is caused by the shipping company, a claim can be filed with the shipping company through the agency. It should be noted that all agreements on logistics and agency fees shall be clearly specified in the agency agreement to avoid subsequent disputes affecting the normal shipment of goods.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
From the perspective of international tax planning, the party bearing the import and export agency fees can realize benefit hedging through tax structure optimization. If the exporter bears the agency fee, it can be included in the sales expense and deducted before enterprise income tax, reducing the overall tax burden of the enterprise; if the importer bears the agency fee, eligible applicants can apply for deferred payment of import value-added tax, eliminating the need to advance large amounts of tax in advance and improving the enterprise's cash flow.
In addition, in case of cross-border related transactions, the pricing of agency fees shall comply with the arm's length principle, to avoid being identified as transfer pricing adjustment by the tax authority, which may incur additional tax risks. It should be noted that the selection of the fee bearing party shall be combined with the overall tax structure of the enterprise, and compliance planning shall be carried out in advance to avoid problems in subsequent tax verification.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
From the perspective of cross-border receipt and payment compliance, the party bearing the import and export agency fees shall be consistent with the receipt and payment route. If the exporter bears the agency fee, it shall pay directly to the agency company through the enterprise's RMB account or foreign exchange account, and shall not transfer through a third-party personal account, to avoid being identified as illegal receipt and payment of foreign exchange by the State Administration of Foreign Exchange (SAFE).
If the importer bears the agency fee, the fee shall be paid to the foreign exchange account of the agency company through cross-border payment channels, and "import and export agency service fee" shall be indicated in the payment remarks, and relevant payment vouchers shall be retained for SAFE verification. In addition, if RMB cross-border payment is involved, it shall be handled through the CIPS system to ensure the compliance of the fund route. It should be noted that all fee receipts and payments shall comply with foreign exchange administration regulations, to avoid the enterprise being included in the key supervision list of the SAFE due to non-compliant receipt and payment of foreign exchange.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
From the perspective of international trade law, the party bearing the import and export agency fees shall first be subject to the stipulations of the trade contract and agency agreement. If there is no clear stipulation in the contract, it shall be determined in accordance with the provisions of INCOTERMS® 2020. For example, under FOB terms, the exporter bears all costs before the goods pass the ship's rail at the port of shipment, including the domestic agency customs clearance fee; the importer bears all costs after the goods pass the ship's rail, including the foreign agency customs clearance fee.
If the contract stipulations are inconsistent with INCOTERMS® 2020, the contract stipulations shall prevail. In addition, if disputes arise due to unclear definition of the party bearing the agency fee, they can be resolved through negotiation, arbitration or litigation, but relevant evidence such as trade contracts, agency agreements and fee lists shall be retained to safeguard one's legitimate rights and interests.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
From the perspective of on-site customs inspection, the party bearing the inspection-related fees among the import and export agency fees shall be linked to the cause of inspection. If the inspection is caused by enterprise reasons such as false declaration of goods and inconsistent documents, the incurred inspection service fee, devanning fee, etc. shall be borne by the responsible party; if the inspection is caused by random customs spot check or system warning, the basic inspection fee incurred shall be borne by the customs, but the service fee for the agency company to assist in the inspection shall be borne in accordance with the contract stipulations.
In addition, if sampling and appraisal are required during the inspection, the incurred appraisal fee shall be borne by the applicant or the responsible party; if it is a compulsory appraisal required by the customs, the fee shall be borne by the customs. It should be noted that if the goods cannot be released due to failure to settle the fees in time, the additional fees such as port detention fee and container rental fee incurred shall be borne by the party who makes the overdue payment.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
From the perspective of goods packaging compliance, the party bearing the special packaging-related fees among the import and export agency fees shall be consistent with the trade terms and contract stipulations. If the goods are dangerous goods requiring UN dangerous goods packaging, the agency-related fees such as packaging testing fee and packaging production fee incurred shall usually be borne by the exporter under FOB terms; under CIF terms, it shall be clearly stipulated in the contract.
In addition, if the agency company assists in handling packaging appraisal, the incurred appraisal service fee shall be borne in accordance with the stipulations of the agency agreement. It should be noted that special packaging fees are itemized fees of import and export agency. If they are not clearly stipulated in the contract, it may lead to disputes between the buyer and the seller, affecting the normal shipment of goods, and even lead to customs seizure of goods due to non-compliant packaging, resulting in additional port detention fees and rectification costs.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
From the perspective of export tax refund compliance, the party bearing the import and export agency fees shall match the consistency of tax refund documents. If the exporter bears the agency fee, the invoice of the agency fee shall be included in the filing scope of tax refund documents to ensure four-flow consistency (contract flow, fund flow, invoice flow, goods flow), so as to avoid affecting the export tax refund declaration due to inconsistent documents.
If the agency fee is borne by the importer, the exporter shall clearly stipulate it in the agency agreement, to avoid the tax authority treating it as a fee irrelevant to the exported goods during verification, which may affect the tax refund amount. In addition, if the agency fee is included in the transaction price of the exported goods, it shall be clearly indicated on the customs declaration form to avoid it being excluded during customs valuation, which may affect the tax basis for tax refund. It should be noted that export tax refund has strict requirements on documents, and the agreement on the fee bearing party shall be consistent with the tax refund documents to ensure tax refund compliance.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
From the perspective of supply chain structure optimization, the party bearing the import and export agency fees can realize cost optimization through supply chain collaboration. If the centralized agency mode is adopted, the core enterprise shall bear the agency fees uniformly, which can reduce the agency cost of individual orders through the scale effect and improve the overall efficiency of the supply chain. If the decentralized agency mode is adopted, the fee bearing party shall be consistent with the responsible party of each node to avoid unclear rights and obligations.
In addition, fee hedging can be realized through the conversion of trade terms, for example, converting FOB terms to EXW terms, where the importer bears all agency and logistics fees, and the exporter is only responsible for the delivery of goods, reducing the cost pressure of the exporter. It should be noted that the adjustment of supply chain structure shall be combined with the overall strategy of the enterprise to ensure cost optimization without affecting the stability of the supply chain.