Which date's foreign exchange rate quotation should be used for export tax refund declaration to meet compliance requirements?

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I am a documentation clerk at a small foreign trade company in Shanghai. Two batches of export tax refund declarations under CIF terms to Germany that I submitted last week were rejected by the tax bureau because the exchange rate filling did not meet the requirements. The shipment dates of these two batches were the 5th and 22nd of the same month, and the euro exchange rate fluctuated sharply at that time.

I hurriedly chose the exchange rate quotation for settlement on the day of shipment to fill in, but was pointed out that it was completely non-compliant. Now there are only 3 days left until the deadline for this month's declaration, and this batch of payment is waiting for the tax refund to arrive to pay the factory balance. I am so anxious that I can't even eat.

I would like to ask, which date's exchange rate should I actually fill in? Are there differences in filling standards for different trade terms? Are there special handling methods when the exchange rate fluctuates greatly?

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Expert Q&A

Evelyn Li
Evelyn LiYears of service：3Customer Rating：5.0

Cross-border Compliance SupervisorStart a Chat

First，conduct pre-documentation audit: check the export date，trade terms and value fields of the export cargo customs declaration form one by one to confirm that they are consistent with the actual shipment records，so as to avoid errors in the exchange rate filling benchmark caused by misplaced document information.

Core links must be strictly followed: the exchange rate for export tax refund declaration must adopt the central parity of RMB foreign exchange rate quotation on the 1st day of the month of the export date (subject to the quotations published by the State Administration of Foreign Exchange)，and the RMB sales amount must be converted based on the FOB value basis -- if the trade term is CIF or CFR，the freight，insurance premiums and miscellaneous fees must be deducted first to restore the FOB value before calculation.

For emergency plans: in case of special circumstances such as the export date falling on the last day of the month or temporary adjustment of foreign exchange rate quotations，retain supporting materials such as screenshots of exchange rate fluctuations and shipment vouchers，file a report with the competent tax authorities in advance to avoid being rejected due to audit discrepancies，if the submitted declaration is rejected due to exchange rate issues，re-fill in according to the standards before the declaration deadline and attach an explanation letter.

Final compliance implementation: after completing the filling，verify the logical matching between the exchange rate and the value through the pre-declaration system，and submit formally only after confirming that there are no errors，to ensure one-pass tax refund audit.

Reference: Import and Export Tax Agency Company: Full Process Compliance Tax Service Guide
Michael Zhang
Michael ZhangYears of service：6Customer Rating：5.0

Customs Declaration & Compliance ExpertStart a Chat

First, confirm the accuracy of the export date on the customs declaration form. The export date on the customs declaration form in the customs system is the core basis for the tax authorities to determine the exchange rate benchmark. If the export date spans months due to customs declaration form modification, update it in the customs system in time and synchronize it to the tax declaration system to avoid triggering audit warnings due to incorrect exchange rate benchmark month.

In addition, if the customs declaration is submitted through the E-port paperless declaration system, retain the electronic screenshot of the export date as backup materials, and be able to directly provide the corresponding vouchers when the tax authorities conduct investigation letters. For customs declaration forms of consolidated container shipments, ensure that the exchange rate conversion of the value of each individual shipment is logically consistent with the entire container customs declaration information, and do not confuse the exchange rate benchmark due to consolidated container splitting.

Lucas Liu
Lucas LiuYears of service：8Customer Rating：5.0

Senior Operations ConsultantStart a Chat

The choice of exchange rate for export tax refund declaration directly affects the RMB accounting of export sales, which is further related to the accuracy of the tax basis for tax refund. From the perspective of tax planning, strictly follow the rule of the central parity on the 1st day of the month to avoid overstating or understating the sales amount due to the use of other exchange rates, which will arouse the tax authorities' questions about related party transaction pricing.

If the enterprise involves cross-border related party transactions, ensure that the RMB sales amount after exchange rate conversion is consistent with the related party transaction pricing policy to avoid triggering BEPS-related investigations. In addition, you can lock the forward foreign exchange settlement exchange rate in advance to hedge the impact of exchange rate fluctuations on the tax refund amount, but pay attention that the difference between the settlement exchange rate and the declaration exchange rate shall not deviate from a reasonable range, and retain relevant transaction vouchers for backup.

Victor Sun
Victor SunYears of service：5Customer Rating：5.0

Trade Risk Control ManagerStart a Chat

The exchange rate for export tax refund declaration must be logically matched with the exchange rate in the receipt and payment link to avoid triggering compliance warnings for receipt and payment due to "excessive deviation between declaration exchange rate and settlement exchange rate". If RMB cross-border payment (CIPS) is adopted, ensure that the deviation between the declaration exchange rate and the RMB settlement exchange rate on the payment day is within a reasonable range (usually no more than ±2%), and retain payment vouchers and exchange rate screenshots for backup.

For foreign currency receipts from offshore accounts, convert the foreign currency receipt amount into RMB sales amount according to the declaration exchange rate, and check it with the offshore account settlement records to avoid mismatches between capital flow, cargo flow and invoice flow due to exchange rate conversion differences. If there is a large difference between the receipt and payment exchange rate and the declaration exchange rate, attach an explanation letter when declaring, clearly stating whether the difference is caused by market fluctuations or settlement methods.

Kevin Lin
Kevin LinYears of service：4Customer Rating：5.0

Trade Solutions ManagerStart a Chat

In the export tax refund compliance audit, the core requirement for exchange rate filling is "four-flow consistency", that is, the declaration exchange rate must be logically matched with cargo flow (export date), invoice flow (total price and tax of VAT invoice), capital flow (receipt amount) and information flow (customs declaration form information). Retain the screenshots of foreign exchange rate quotations on the 1st day of the month of the export date, customs declaration forms, receipt vouchers and VAT invoices in a unified archive, with a filing period of at least 5 years.

If the tax authorities initiate an investigation letter, be able to provide the above vouchers within 3 working days to prove the compliance of the exchange rate selection. For export goods declared across months, strictly fill in according to the exchange rate on the 1st day of the month corresponding to the actual export date, and do not use the exchange rate of the declaration month due to the cross-month declaration time, otherwise it will be judged as non-compliant declaration and face the risk of deferred tax refund or overdue tax payment.

Cindy Chen
Cindy ChenYears of service：3Customer Rating：5.0

Key Account ManagerStart a Chat

The shipping date and bill of lading date in the logistics link must be consistent with the export date on the customs declaration form, which is the key prerequisite for confirming the exchange rate benchmark. If the actual shipping date spans months from the export date on the customs declaration form due to container unloading or port change, apply to the customs in time to modify the export date on the customs declaration form to ensure that it matches the actual shipment date, so as to avoid the tax refund declaration being rejected due to incorrect exchange rate benchmark month.

In addition, for freight and insurance premiums under CIF terms, deduct them from the value of the customs declaration form before converting to FOB value according to the exchange rate. Logistics documents (ocean bill of lading, freight invoice, insurance voucher) must correspond one-to-one with the deducted amount and be retained for backup. If the logistics documents are delayed, indicate the reason and promise the time for supplementing the documents when declaring, so as to avoid affecting the audit progress due to incomplete information.

Grace Wang
Grace WangYears of service：10Customer Rating：5.0

Senior Foreign Trade ConsultantStart a Chat

The reference standard for exchange rate conversion must be clearly agreed in the international trade contract to avoid conflicts between the export tax refund declaration exchange rate and the contract agreement due to vague contract terms. If the contract stipulates that settlement shall be made according to the exchange rate on the day of shipment, indicate the contract terms when declaring, and explain that the declaration exchange rate adopts the central parity on the 1st day of the month required by the tax authorities.

The difference between the two is only due to different accounting calibers and does not affect the actual transaction consideration. At the same time, retain the original contract, settlement vouchers and other materials, which can be used as compliance basis if disputes between buyers and sellers arise due to exchange rate differences. In addition, if the enterprise adopts RMB settlement, the contract must clearly stipulate RMB pricing to avoid mismatches between the declaration exchange rate and the contract logic due to currency conversion, which may trigger legal disputes or tax audit risks.

Eric Zhou
Eric ZhouYears of service：6Customer Rating：5.0

Senior Manager of Foreign Exchange & Tax RebatesStart a Chat

In supply chain planning, the selection of exchange rate for export tax refund declaration should be linked with procurement and shipment nodes, and the trend of exchange rate fluctuations should be predicted in advance. If it is predicted that the exchange rate will fluctuate sharply in the month of export, adjust the shipment time to a month with relatively stable exchange rates, or lock the exchange rate difference between procurement and sales through forward foreign exchange contracts to optimize the overall supply chain cost.

In addition, sort out the value accounting caliber uniformly according to trade terms, collect freight and insurance premium vouchers in advance under CIF terms to ensure that they can be timely converted to FOB value for exchange rate conversion, so as to avoid declaration delay caused by delayed information. At the same time, establish a standardized process for exchange rate accounting, embed links such as customs declaration form export date, foreign exchange rate quotation inquiry and exchange rate conversion into the supply chain management system, reduce manual filling errors and improve the efficiency of tax refund declaration.

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