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How to Handle Compliance When Receiving Foreign Exchange for Export Goods Without Customs Declaration?
or complex compliance issues.
clearance and fund security.
I am the owner of a small foreign trade enterprise based in Shanghai, mainly engaged in home storage products. Last week I sent a trial order of goods worth 8000 USD via DHL. Due to the rush to meet the client's exhibition schedule, and I had always shipped samples via courier without customs declaration before, I did not complete formal customs declaration procedures this time either.
As a result, the client paid 12000 USD in advance, which covers the payment for this batch of goods and the deposit for the next bulk order. Now the bank has placed this amount in the pending verification account, stating that I cannot settle foreign exchange without the corresponding customs declaration form. I am extremely anxious, I have checked many materials but still feel confused.
I not only worry that I cannot settle the foreign exchange which will tie up my capital, but also worry that this will trigger an early warning from the State Administration of Foreign Exchange (SAFE), affect my future foreign exchange receipt and payment quota, and whether the tax authority will determine I have evaded taxes. I have never encountered this situation before, I really do not know where to start.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
First，conduct pre-document review，and organize a full set of transaction documents: including foreign exchange receipt slip，Chinese-English sales and purchase contract signed with the client，proforma invoice，courier waybill，etc. Clarify the cargo attribute (this transaction involves trial order goods plus bulk order deposit，not pure samples)，distinguish the proportion of cargo payment and deposit in the total received foreign exchange，to avoid information deviation in subsequent filing.
In terms of core node connection，for the 8000 USD trial order payment，if the goods have not left the country for more than 30 days，you can immediately contact the courier company to supplement Cross-border E-commerce Type B Customs Declaration or small-value customs declaration for general trade，for the 4000 USD bulk order deposit，you can link it to the customs declaration form of the subsequent bulk order through Differential Foreign Exchange Receipt Filing. It should be noted that when submitting filing to the bank，you need to mark the description as "advance payment + supplementary declaration for undeclared goods"，and submit the Trade Foreign Exchange Receipt and Payment Information Declaration Registration Form to SAFE simultaneously.
Abnormal contingency plan: If the amount is pending in the bank's verification account for more than 7 days，you need to first submit a situation description with your company's official seal to the bank，and start the supplementary customs declaration process simultaneously，to avoid the account being marked as an "abnormal foreign exchange receipt account".
Final compliance implementation: After completing customs declaration or filing，apply for foreign exchange settlement to the bank with relevant documents，in terms of tax，the payment part for undeclared goods needs to be declared as invoiceless income，or declared for tax refund together after the subsequent bulk order clears customs，to ensure the logical consistency of capital flow，cargo flow and invoice flow.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
If the goods have left the country for more than 30 days, supplementary routine customs declaration may face customs price verification doubts. At this time, you need to first prepare documents such as the cargo purchase contract, cost breakdown, and communication records with the client, and apply for "post supplementary declaration" to the local customs. It should be noted that the customs declaration form for post supplementary declaration needs to be marked with "supplementary declaration of undeclared export goods".
The customs may re-verify the cargo value. If there is a price verification dispute, you need to provide a certification document from a third-party price certification agency, to avoid deletion and re-declaration caused by inconsistency between the declared price and the actual received foreign exchange. Meanwhile, after the supplementary declaration is completed, you need to synchronize the electronic data of the customs declaration form to SAFE and the bank in time, to ensure that the foreign exchange receipt data matches the customs declaration data.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
If the goods are exported via courier channel without customs declaration, you need to contact the courier company to retrieve original data such as the cargo's transportation track, weight and volume, to judge whether it meets the threshold for courier customs declaration (for example, most ports require that courier goods with value below 5000 USD and weight below 50kg can go through personal goods declaration, but trade goods need to be converted to commercial customs declaration). If it exceeds the courier customs declaration limit, it needs to be converted to general trade customs declaration.
At this time, you need to entrust a qualified customs broker to handle the transit procedures, to avoid information disconnection caused by the goods having left the country. Meanwhile, you need to ask the courier company for a "Certificate of Undeclared Export" as an auxiliary document to explain the situation to the bank and SAFE later.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
After receiving foreign exchange for undeclared export, it is necessary to distinguish two situations at the tax level: if it is a sample or small-value cargo (cumulative annual value is less than 100,000 RMB), it can be declared as invoiceless income under "deemed domestic sales" and pay value-added tax; if it is trade cargo and you will supplement customs declaration later, you need to link the foreign exchange receipt data with the customs declaration data after customs declaration is completed, and mark "supplementary declaration of undeclared foreign exchange receipt" when applying for export tax refund, to avoid tax refund correspondence investigation caused by the foreign exchange receipt time being earlier than the customs declaration time. In addition, if cross-border related party transactions are involved, it is necessary to ensure that the received price conforms to the arm's length principle, to avoid being identified as profit shifting by the tax authority.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
After receiving foreign exchange for undeclared export, you need to first make "abnormal foreign exchange receipt declaration" in the foreign exchange monitoring system, mark the reason for receiving foreign exchange and the subsequent compliance plan, to avoid being listed as a key monitoring target by SAFE.
If your enterprise has a cooperative foreign trade agency, you can complete "collection and payment filing via agency" through the agency, and include the undeclared received foreign exchange into the agency's compliant foreign exchange receipt and payment system, but you need to sign a formal collection and payment agency agreement, clarify the rights and obligations of both parties, to avoid fund ownership disputes. Meanwhile, when settling foreign exchange, you need to provide complete transaction documents to the bank, including contracts, invoices, courier waybills, etc., to ensure that the fund purpose matches the transaction background.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
If a dispute arises with the client or logistics enterprise due to undeclared export with foreign exchange receipt, you need to keep all transaction evidence in advance, including communication records, payment vouchers, transportation documents, etc. If the client refuses further cooperation on the grounds of no customs declaration, you can claim rights in accordance with the "delivery clause" in the sales and purchase contract.
Most foreign trade contracts stipulate that "goods delivery is subject to the client's signature and receipt", and no customs declaration does not affect the establishment of the delivery fact. Meanwhile, if a compliance investigation by SAFE is involved, you need to cooperate to provide relevant documents, to avoid penalty escalation caused by improper statement.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
If you encounter on-site customs inspection when supplementing customs declaration, you need to prepare documents such as cargo packing details, product instructions, and material certificates in advance, and cooperate with the customs to complete devanning inspection. If there is a minor difference between the cargo and the declared content (such as different packing method), you need to submit a situation description on site, to avoid being identified as false declaration.
In addition, it should be noted that if the supplementary declared cargo has been received by the client, you need to provide the client's receipt certificate, explain the actual flow of the cargo to the customs, to avoid inspection obstruction caused by the cargo not being in the supervision area.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
If the undeclared export cargo is dangerous goods or fragile goods, you need to additionally provide documents such as MSDS report and dangerous goods packaging performance inspection result sheet when supplementing customs declaration.
If you did not use compliant packaging at that time, you need to explain the packing reinforcement measures during transportation to the customs, and provide the packaging certification document from the courier company, to avoid customs declaration failure caused by non-compliant packaging. Meanwhile, when shipping similar cargo in the future, you need to confirm customs declaration requirements in advance, use packaging that meets UN standards, to avoid the occurrence of undeclared export with foreign exchange receipt again.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
If undeclared export with foreign exchange receipt involves subsequent tax refund, it is necessary to ensure that the received foreign exchange and the subsequently declared cargo belong to the same transaction, to avoid the situation of "more foreign exchange received, less cargo declared".
When declaring tax refund, you need to remark the situation of undeclared foreign exchange receipt in the Export Goods Tax Refund Declaration Form, and submit auxiliary materials such as foreign exchange receipt slip and situation description simultaneously, to avoid the tax authority initiating a correspondence investigation procedure. In addition, you need to keep relevant documents for future reference for at least 5 years, including foreign exchange receipt vouchers, supplementary customs declaration forms, transaction contracts, etc., to ensure the compliance of the tax refund process.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
From the supply chain level, it is necessary to establish a "linked early warning mechanism for customs declaration and foreign exchange receipt", clarify the time nodes of customs declaration and foreign exchange receipt when signing the order, and select suitable customs declaration methods for small cargo such as "market procurement trade" or "cross-border e-commerce retail export" in advance for samples or small-batch cargo, to avoid the situation of undeclared export with foreign exchange receipt.
Meanwhile, you can cooperate with an agency company, and entrust the agency to handle the customs declaration and foreign exchange receipt of small cargo uniformly, optimize the supply chain process and reduce compliance risks. In addition, you need to regularly review the foreign exchange receipt and payment data, check for potential compliance loopholes, and formulate response plans in advance.