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Who is the Statutory Responsible Subject of Customs Declaration and Tax Refund Under Agent Export Mode, the Principal or the Agent?
or complex compliance issues.
clearance and fund security.
I am the owner of a small clothing manufacturing enterprise in Shanghai. I exported a batch of women's clothing to Germany through a foreign trade agent for the first time last month, and now we are at the stage of customs declaration and tax refund, I am very worried.
I heard from my peer before that a company was interviewed by the tax bureau for non-compliant agent tax refund operation, and also paid back more than 100,000 yuan of tax. But the agent insists that they take full charge of the tax refund and ask me not to worry about it. But I have no idea whether the responsible subject of agent export customs declaration and tax refund is me or the agent.
If there is under-reporting or misreporting in the operation process, who will bear the consequence after all? I am afraid that I will take the blame in a muddle and do not even know how to protect my rights. Can you clarify this for me?
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
First of all，we need to expose a common misunderstanding in the industry: Many principals mistakenly believe that as long as they sign an agency contract，all responsibilities for customs declaration and tax refund will be borne by the entrusted agent. This is an extremely dangerous perception.
This misunderstanding will trigger a series of negative consequences: If the agent misreports the value of the goods or omits tax refund documents during customs declaration，the tax bureau will first interview the principal (the owner of the cargo title). It will not only suspend the tax refund approval for this batch，but may also list the enterprise on the export tax refund risk control list. All subsequent tax refunds for export business will be subject to key verification. In serious cases，it will also face penalties of back tax payment and late payment fine，and even affect the enterprise's customs credit rating，leading to frequent inspection and port congestion during cargo clearance.
Physical risk isolation measures: When signing an agency contract，the clause on division of rights and responsibilities for agent export customs declaration and tax refund must be clearly defined，and the contents such as customs declaration subject，tax refund declaration subject，and responsibility attribution shall be fixed in writing. At the same time，all written records of document review，communication and confirmation，including emails，WeChat screenshots，etc。shall be retained.
Exclusive stop-loss tip: Require the agent to provide a monthly tax refund progress ledger，and jointly complete pre-declaration verification before formal declaration，check out document consistency problems in advance. Once non-compliant operation of the agent is found，suspend cooperation immediately，complain to the industry association，and submit a situation description to the tax bureau to clear the responsibility.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The declaration subject in the agent export customs declaration link is usually the entrusted foreign trade agency company. This is because the agency company has import and export operation rights and meets the qualification requirements of the customs for the declaration subject. However, it should be noted that when the customs reviews the declaration form, it will also check the principal's cargo title certificate and relevant documents.
If there is inconsistency between the declaration information and the actual goods, the customs will not only hold the agency company accountable, but also list the principal on the abnormal list. In addition, if the agency company has customs credit problems, the principal's goods may also be implicated and inspected. Therefore, when selecting an agent, you need to check its customs credit rating (Class A and above is optimal), and clarify the review responsibility of customs declaration information in the agency contract, and require the agent to provide the pre-entry draft of the declaration form for the principal's confirmation before submitting the declaration.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
In the whole link of agent export, the connecting subject between the customs declaration link and the logistics node is the agency company, but the logistics documents (such as bill of lading, manifest) required for tax refund need to be confirmed by the principal for information accuracy. If the agency company makes a mistake when entering the logistics manifest, it will lead to inconsistency between the declaration form and the manifest information, which will affect the tax refund progress.
In addition, if the goods are detained by the customs due to wrong declaration information, the resulting port storage fee and container detention fee are usually borne by the responsible party. Therefore, it needs to be agreed in the agency contract that the obligation of information verification of logistics documents belongs to the principal, and the agency company is only responsible for submission and entry.
If the loss is caused by the agent's entry error, it shall be fully compensated by the agent. At the same time, the principal needs to retain the original scanned copy of the logistics documents for use during tax refund verification.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
The statutory responsible subject of agent export tax refund is the principal, because the principal is the actual owner of the exported goods, enjoys the right of tax refund and undertakes the corresponding compliance responsibility at the same time. But in actual operation, tax refund declaration is usually completed by the agency company.
At this time, the agency company, as the entrusted executive subject, needs to declare according to the real documents provided by the principal. If the agency company misreports the tax refund data for its own interests, the principal needs to bear the responsibility of back tax payment and late payment fine, but can recover the compensation from the agency company according to the agency contract.
In addition, if the principal has problems such as non-collection of foreign exchange and incomplete documents, the tax refund will be rejected by the tax bureau even if the agency company completes the declaration. Therefore, the principal needs to ensure that its own business meets the preconditions for tax refund, such as real export of goods, full and timely foreign exchange collection, etc.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The compliance responsibility for foreign exchange collection and payment in the process of agent export customs declaration and tax refund belongs to the principal, because the principal is the subject of foreign exchange collection, and the agency company is only responsible for assisting in the procedures of foreign exchange collection. If the principal has problems such as delayed foreign exchange collection and inconsistency between the foreign exchange amount and the declaration form, the tax refund will be suspended by the tax bureau.
In addition, if the agency company uses a non-compliant account to handle foreign exchange collection, it may be listed as an abnormal account by the State Administration of Foreign Exchange, which will implicate the principal's foreign exchange income and expenditure quota. Therefore, the principal needs to require the agency company to use a corporate account with import and export foreign exchange collection and payment qualification to handle foreign exchange collection, retain the original scanned copy of the foreign exchange receipt water bill, and timely declare the foreign exchange collection information to the State Administration of Foreign Exchange to ensure that the information of foreign exchange collection and payment is consistent with the information of customs declaration and tax refund.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
The division of rights and responsibilities for agent export customs declaration and tax refund shall be based on the written contract. If the responsibility attribution is not clearly agreed in the contract, according to the Civil Code and relevant regulations on foreign trade agency, the principal needs to bear the final compliance responsibility, and the agency company only bears the fault responsibility within the entrusted scope.
For example, if the agency company fails to handle customs declaration and tax refund according to the principal's instructions, resulting in loss, the principal can hold it liable for breach of contract according to the contract; but if the problem is caused by false and incomplete documents provided by the principal, the responsibility shall be borne by the principal itself. Therefore, when signing the agency contract, it is necessary to clearly agree on the operation process, division of responsibilities, liability for breach of contract and other clauses of customs declaration and tax refund. At the same time, you can add a "compliance exemption clause", that is, if the compliance risk is caused by the fault of the agency company, it shall bear all compensation responsibilities.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
When doing agent export customs declaration, if the goods are inspected on site by the customs, the cooperating subject of the inspection link is the agency company, but the principal needs to provide the real information of the goods and relevant documents to assist the inspection. If the agency company fails to truthfully declare the goods information to the customs, resulting in failure of the inspection, the resulting losses such as cargo detention and port storage fee shall be borne by the agency company; but if the inspection abnormality is caused by inconsistent goods information provided by the principal, the responsibility shall be borne by the principal.
In addition, the principal needs to require the agent to notify himself immediately after receiving the inspection notice, accompany the inspection process, and retain the inspection records and on-site photos for subsequent tax refund verification or liability investigation. At the same time, the principal needs to ensure that the packaging and marking of the goods meet the customs requirements, to avoid inspection failure caused by packaging problems.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The packaging documents required for agent export customs declaration and tax refund (such as MSDS, dangerous goods packaging certificate) shall be provided by the principal, and the agency company is only responsible for submitting these documents together with the declaration form to the customs. If the packaging documents provided by the principal do not meet the requirements, the declaration form will be rejected, which will affect the tax refund progress.
In addition, if the goods are detained by the customs due to non-compliant packaging, the resulting loss shall be borne by the principal. Therefore, the principal needs to ensure the authenticity and compliance of the packaging documents. If it involves dangerous goods, it is necessary to entrust a qualified institution to issue MSDS and dangerous goods packaging certificate, and require the agent to check the integrity of the packaging documents before submitting the declaration form, and retain the original scanned copy of the packaging documents for use during tax refund verification.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The document filing responsibility of agent export tax refund belongs to the principal. According to the regulations of the tax bureau, the principal needs to retain all documents related to the export business (such as declaration form, bill of lading, purchase and sales contract, foreign exchange receipt water bill) for audit. If the agency company fails to assist the principal to complete the document filing, or the filed documents are incomplete, the tax bureau will suspend the principal's tax refund qualification during the audit.
In addition, if the agency company omits key documents during tax refund declaration, resulting in rejection of tax refund, the principal can hold the agency responsible according to the agency contract. Therefore, the principal needs to require the agency company to provide the document list of tax refund declaration every month, retain the original scanned copy of all documents by themselves, and conduct self-inspection of document filing every quarter to ensure compliance with the requirements of the tax bureau.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
From the perspective of the entire supply chain, the subject attribution of agent export customs declaration and tax refund is related to the trade mode. If the "buy-out agency" mode is adopted, the tax refund responsible subject is the agency company; if the "entrusted agency" mode is adopted, the tax refund responsible subject is the principal. There are also differences in cost and income under different modes: the principal of buy-out agency does not need to bear the tax refund risk, but the income is relatively low; the principal of entrusted agency enjoys the full tax refund income, but needs to bear the compliance risk.
Therefore, the principal needs to select a suitable agency mode according to its own business scale and compliance capability. If the business scale is small and the compliance capability is insufficient, you can choose buy-out agency; if the business scale is large and you have certain compliance capability, you can choose entrusted agency to obtain higher income.