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What Are the Legal Payees of Import Agency Fees? Which Non-compliant Collecting Entities Should Be Wary Of?
or complex compliance issues.
clearance and fund security.
I am an e-commerce procurement manager of a company that just started importing beauty products in Shanghai. Last week, I ordered 200 boxes of cushion foundation from Incheon Port, South Korea for the first time, and hired a company that claimed to be qualified to handle customs clearance for me.
Today I received the bill from the agent, and there are actually three collecting entities listed: their own company, a customs brokerage, and a warehousing service company, and the agency fee is split into two accounts. I always thought that import agency fees only need to be paid to the agency company, now I am completely confused and very worried -- a peer of mine paid the wrong entity last month, which led to disconnected docking of customs declaration documents, and the cargo was detained at the port for 5 days, he lost more than 80,000 RMB just for port detention and storage fees.
I am very anxious with this bill now, I am afraid I will pay to the wrong entity and lose money, and I am also afraid of delaying the customs clearance schedule. I want to figure out who exactly should import agency fees be paid to, which fees are mandatory, and could it be that the agent intentionally splits accounts to defraud money?
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
First，we reveal a common misunderstanding in the industry: Many import novices mistakenly think that import agency fees only need to be paid to the cooperating agency company. In fact，legal split collection does exist，but some unethical agents intentionally split fees to unqualified entities or private accounts to make illegal profits.
If you mistakenly pay agency fees to unqualified entities，it will trigger a series of chain negative reactions: For example，if you pay an institution that has not obtained customs declaration qualification，non-compliant customs declaration documents may lead to cargo detention by customs and port detention，resulting in high port detention fees and storage fees. In severe cases，your company will even be listed on the customs dishonesty list. If you pay to a private account，you cannot get a formal value-added tax invoice，which not only makes tax deduction impossible，but you may also face the risk of tax inspection.
Physical risk isolation measures: Require all collecting entities to provide business licenses and relevant business qualification certificates，and check whether the scope of qualification matches the actual business. For example，customs brokerages need to have the Registration Certificate of Customs Brokerage Enterprise issued by customs.
Exclusive loss mitigation tips: Clearly lock all legal collecting entities，their accounts and corresponding fee breakdown in the agency contract，require the agent to provide business vouchers for each payment before payment (such as customs power of attorney，warehousing agreement). If you find that the collecting entity does not match the contract，immediately suspend payment and require the agent to issue a compliance explanation. You can verify the qualification of the entity with the customs or tax department when necessary.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
For the part of import agency fees that involves customs declaration services, the collecting entity must be a formal customs brokerage institution with the Registration Certificate of Customs Brokerage Enterprise issued by customs. If you mistakenly pay to an unqualified entity, the customs declaration form cannot be normally entered into the customs single window system, which will trigger problems such as valuation disputes and declaration cancellation and re-submission. In severe cases, the cargo will be detained by customs, resulting in high port detention fees and storage fees.
You can verify the qualification validity and business scope of the collecting entity through the "Customs Brokerage Enterprise Information Inquiry System" on the official website of the General Administration of Customs. If the agent splits the customs brokerage fee to a third-party customs brokerage, you should require them to provide the formal entrustment agreement signed by both parties, and clarify the attribution of customs declaration responsibility to avoid buck-passing. In addition, you need to retain the payment voucher, invoice and customs declaration form of the customs brokerage fee to ensure the consistency of contract, invoice and payment voucher, and avoid subsequent customs inspection risks.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
For the supporting logistics fees included in import agency fees, such as warehousing, trailer transportation and document exchange, the collecting entity must be a formal logistics enterprise or warehousing service provider with international freight forwarding qualification. If you mistakenly pay to an unqualified entity, you may not be able to claim responsibility after the cargo is lost or damaged. Some unqualified warehousing providers may also have risks such as overdue charging and illegal transfer of cargo title. You should require the agent to provide vouchers for corresponding logistics services.
For example, warehousing fees need to match warehouse receipts and formal warehousing agreements, and trailer fees need to provide transportation dispatch orders and signing records. If the agent requires that logistics fees be paid to a third party outside the contract, you need to verify the entrustment agreement between the two parties to ensure that the capital flow corresponds to the actual service, and prevent the agent from making profits by fabricating fees.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The collecting entity of import agency fees must be a tax-paying entity that can issue formal special value-added tax invoices. If you mistakenly pay to an institution or private account without invoicing qualification, you cannot complete input tax deduction, which will directly increase the tax cost of the enterprise. If the agent splits the agency fee into multiple entities, you need to ensure that the invoice content issued by each entity matches the actual service.
For example, the invoice for customs brokerage fee should be marked "agency customs declaration service", and the invoice for warehousing fee should be marked "warehousing service". At the same time, it must meet the requirement of consistency of contract, invoice and payment voucher, which conforms to the deduction provisions of the Provisional Regulations on Value-Added Tax. In addition, you need to retain all invoices and vouchers to avoid being unable to deduct before tax due to incomplete vouchers when the corporate income tax is settled.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
The payment of import agency fees must comply with the compliance requirements of cross-border foreign exchange receipt and payment. If the agency fee is paid to an overseas entity, you must complete the tax filing for external payment, otherwise you will be listed on the key monitoring list by the State Administration of Foreign Exchange, which will affect subsequent cross-border foreign exchange receipt and payment businesses.
If the agent requires that the agency fee be paid to an overseas private account, it may involve illegal acts such as foreign exchange evasion and money laundering, you should immediately refuse and require to change to a compliant collecting entity. For domestic collecting entities, you can verify the compliance of the account through the CIPS system to ensure that the capital flow is consistent with the agreement in the agency contract, and retain the foreign exchange receipt and payment vouchers and contracts to avoid foreign exchange inspection caused by abnormal capital flow.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The collecting entity of import agency fees must be consistent with the entity that signed the agency contract. If the agent requires that the fee be paid to a third party outside the contract, a formal supplementary agreement must be signed to clarify the service content, fee amount and rights and responsibilities of the third party, so as to avoid legal disputes caused by the inconsistency between the contract entity and the collecting entity.
If the agent splits the fee to multiple entities, the liability for breach of contract of each entity must be clearly defined in the supplementary agreement. For example, if the cargo is detained by customs due to the non-compliance of the collecting entity, the agent must bear all port detention fees and losses. In addition, you need to retain all contracts, supplementary agreements, payment vouchers and service documents as legal evidence for subsequent rights protection.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
For the inspection auxiliary service fee involved in import agency fees, the collecting entity must be a formal institution with customs inspection auxiliary qualification. If you mistakenly pay to an unqualified entity, there may be problems such as fake inspection reports and illegal operations, which will lead to re-inspection of the cargo by customs or even detention of the cargo.
You should require the agent to provide vouchers such as the inspection notice and inspection report issued by customs to ensure the authenticity of the inspection service. If the agent requires additional inspection fees, you need to verify whether the fee meets the charging standard of customs to prevent the agent from making profits by fabricating inspection fees. In addition, you need to retain all vouchers for inspection services as supporting materials for subsequent customs inspection.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
If the import agency fee includes special packaging service fees, the collecting entity must be an enterprise with corresponding special packaging qualification. For example, dangerous goods packaging requires UN packaging qualification, and food packaging requires food contact material testing qualification.
If you mistakenly pay to an unqualified entity, the packaging may not meet the requirements of customs or transportation, which will lead to risks such as cargo detention by customs and transportation accidents. You should require the agent to provide the qualification certificate, MSDS report, packaging inspection certificate and other vouchers of the packaging enterprise to ensure that the packaging service meets the requirements of international transportation and customs supervision, and retain the payment voucher and invoice for the packaging fee to avoid compliance risks caused by incomplete vouchers.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
As a cost expense of an enterprise, import agency fees need a complete voucher chain to be deducted before tax when the corporate income tax is settled. The compliance of the collecting entity is the core link of the voucher chain. If the collecting entity has no legal qualification, the corresponding expense voucher may be deemed non-compliant by the tax authority and cannot be deducted before tax, which increases the tax burden of the enterprise.
You should establish an internal audit process for import agency fees, regularly check the matching between the qualification of the collecting entity, the fee breakdown and the actual business, ensure the consistency of contract, invoice and payment voucher, avoid tax audit risks caused by non-compliant expenses, and retain all audit records as supporting materials for tax inspection.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
From the perspective of supply chain risk management, the collecting entities of import agency fees should be included in the enterprise's qualified supplier management system, and the qualification, credit and service capability of the collecting entities should be evaluated to avoid cooperation with entities with bad credit and no qualification. You can optimize the payment process of import agency fees, give priority to the method of centralized payment to the agency company, and the agency company will uniformly pay the supporting fees to third parties, so as to reduce the risk points of capital flow.
At the same time, establish a supply chain risk early warning mechanism. If the collecting entity of the agent changes, immediately conduct qualification verification and credit evaluation to avoid compliance risks caused by the entity change, and ensure the smooth operation of the import supply chain.