Connect & Solve
Trade Q&A
Who is Responsible for Customs Declaration, Logistics, Taxes and Other Various Costs Involved in Agent-Imported Vehicles?
or complex compliance issues.
clearance and fund security.
I am a purchaser from a small automobile trading company in Shanghai that has just entered the parallel imported vehicle business. I negotiated the import business of a batch of Middle East version Prado with an agency company last week, but I was uncertain when signing the contract.
The quotation they provided only listed the basic agency fee, and did not mention core costs such as customs declaration, logistics and taxes. I am afraid that a large number of additional costs will suddenly pop up and require me to bear later. Besides, if there are unexpected costs such as port detention fee and inspection fee during transportation, who should pay for it exactly, me or the agent?
If extra fines are generated due to the agent's operation error, who should pay this money? I get more anxious the more I think about it. I am afraid of falling into a trap and suffering losses, and I want to figure out how the cost bearing rules work here.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
A common industry misunderstanding is that many clients default that all costs of agent-imported vehicles are included in the basic agency fee，or only focus on the explicit quotation and ignore implicit cost items not specified in the contract.
If the responsible party of costs is not clarified in advance，it is very easy to cause a series of negative consequences later: for example，the agent will temporarily require payment of unlisted inspection fee and port detention fee during customs clearance. The client's refusal to pay will lead to over-duration port detention of the vehicle，generate high container detention fee，and even trigger customs detention of the vehicle. This will not only delay the sales opportunity，but also may lead to customs fines and cause double losses.
Physical risk isolation shall start from the contract，require the agent to provide a full-link detailed cost list，mark the responsible subject of each cost one by one，covering customs declaration fee，logistics transportation fee，tariff，value-added tax，consumption tax，as well as potential additional costs such as port detention fee and inspection fee.
The exclusive loss stop tip is to add a pre-mediation clause for cost disputes in the contract，stipulating that if unlisted extra costs occur，the agent must provide official certificates first before negotiating on the responsible party. Meanwhile，the agent shall be required to purchase full-range cargo insurance for the vehicle to transfer unexpected risks during transportation.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
Costs in the customs declaration link of agent-imported vehicles mainly include customs declaration agency fee, customs inspection fee, commodity inspection fee, etc. Among them, customs declaration agency fee is usually borne by the entrusting party (i.e., the buyer), which is the consideration for the agency company providing customs declaration services; if the customs inspection is generated by routine random inspection, it is generally also borne by the buyer. However, if it is a special inspection caused by the agent's inaccurate document declaration, the extra costs generated shall be borne by the agent. In addition, if the vehicle is detained by customs due to inconsistent customs declaration materials, the generated port detention fee, rectification fee, etc. shall be divided according to liability attribution.
If it is caused by the agent's mistake, the agent shall bear it, otherwise the buyer shall bear it. It should be noted that some agency companies will package customs declaration fees into the basic agency fee. You need to clarify whether all customs declaration related costs are included when signing the contract to avoid disputes later.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
Logistics costs of agent-imported vehicles cover international ocean freight, port lifting fee, domestic trailer fee, container detention fee, etc. According to the conventional agency mode, international ocean freight is borne by the buyer under FOB terms, while under CIF terms it is included in the commodity price and paid by the buyer; port lifting fee and domestic trailer fee are usually borne by the buyer, which are necessary costs for logistics landing.
If container detention fee is generated due to the space shortage of the logistics provider selected by the agent, or extra transfer fee is generated due to the agent's wrong logistics route planning, such costs shall be borne by the agent. In addition, storage fees within the free storage period are generally borne by the shipping company, while storage fees after the expiration are borne by the buyer. The agent shall inform the buyer of the length of the free storage period in advance to avoid unnecessary costs.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
Taxes of agent-imported vehicles mainly include tariff, consumption tax and value-added tax. The legal taxpayer of these three taxes is the consignee of imported goods (i.e., the buyer), so they are usually borne by the buyer.
However, some agency companies provide tax advance service, and will collect the advance amount and corresponding service fee from the buyer later, the service fee ratio shall be clearly specified in the contract. In addition, if the VAT deferral policy is adopted, the buyer can delay paying value-added tax, but needs to meet the qualification requirements stipulated by the customs.
The agent shall assist the buyer to complete the qualification review. If the buyer cannot enjoy the deferral policy due to the agent's failure to handle the procedures in time, the extra capital cost generated shall be borne by the agent. It should be noted that tax calculation shall be based on the customs-approved dutiable price, and the agent shall provide clear tax calculation details to avoid overcharging.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Cost bearing for agent-imported vehicles shall comply with cross-border payment and settlement compliance requirements. For conventional costs such as basic agency fee, logistics fee and taxes, if the contract stipulates that they are borne by the buyer, the buyer shall pay to the agent through formal channels, and shall not split the payment to private accounts, so as to avoid triggering foreign exchange regulatory early warning.
If foreign exchange fines are generated due to the agent's non-compliant payment and settlement operation, such costs shall be borne by the agent. In addition, if the agent requires the buyer to pay the so-called "compliance deposit", it is necessary to verify whether it has legal basis.
If it is an illegal charge, the buyer has the right to refuse payment, and can complain to the regulatory authority. It should be noted that all cost payments shall retain corresponding invoices and payment vouchers to ensure four-flow consistency, so as to avoid tax inspection risks in the later period.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The responsible party of cost for agent-imported vehicles shall first be subject to the agreement of the agency contract signed by both parties. If the contract does not clearly stipulate, the liability shall be divided according to the provisions of the Civil Code on entrusted contracts: the entrusting party shall bear the necessary costs for handling the entrusted affairs, so conventional necessary costs such as customs declaration, logistics and taxes shall be borne by the buyer; however, if extra costs are generated due to the agent's exceeding of authority, intentional misconduct or gross negligence, such as supplementary tax and fine generated by wrong tax calculation caused by the agent's wrong vehicle model declaration, shall be borne by the agent.
In addition, the contract shall clearly specify the specific categories of "necessary costs" and the definition standard of "unexpected costs", and add a breach of contract clause. If one party violates the cost bearing agreement, it shall pay corresponding liquidated damages, so as to avoid that disputes cannot be recovered later.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
From the perspective of the full supply chain, cost bearing for agent-imported vehicles can be reasonably distributed through trade term optimization. Under EXW terms, all costs are borne by the buyer, including factory pickup fee, international transportation fee, taxes, etc.; under CIF terms, international transportation fee and insurance premium are borne by the seller, and other costs are borne by the buyer. Under the agency mode, through negotiation with the agent, some adjustable costs can be transferred to the agent.
For example, ocean freight can be reduced through the agent's logistics bargaining power, the saved part can be agreed to be enjoyed by the buyer, or deducted from part of the agency fee. In addition, a dynamic cost adjustment mechanism can be established, and the adjustment method of cost bearing can be agreed in advance according to changes in exchange rate and tax policy, so as to avoid extra costs caused by policy changes.