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What core compliance conditions must processing reexport trade meet to apply for export tax refund?
or complex compliance issues.
clearance and fund security.
I am the person in charge of an enterprise mainly engaged in hardware processing reexport trade. Last month, we just completed an order for hardware accessories purchased from Vietnam, which were subject to precision processing in Dongguan Comprehensive Bonded Zone and then reexported to Germany. Now when the finance department is sorting out tax refund declaration materials, we found that the trade mode on the customs declaration is marked as "reexport trade".
The small agency we cooperated with before said vaguely that processing reexport may be eligible for tax refund, but we are not sure whether our situation meets the qualification. Besides, we heard last week that a peer not only failed to get tax refund due to non-compliant operations, but also was placed on file for inspection by the tax authority and paid more than 100,000 yuan in back taxes.
I have been so worried recently that I can't even sleep well, for fear that we will work in vain and get involved in compliance risks. I would like to ask whether we can get tax refund for the situation of reexport after processing in the bonded zone? What core conditions do we need to meet? What details should we pay attention to when declaring to avoid pitfalls?
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
First of all，it should be clarified that the core premise for whether processing reexport trade can enjoy tax refund is **actual departure of goods** and compliance with processing value-added requirements. In the pre-document review link，three types of materials should be checked with emphasis: First，the processing filing certificate of the processing enterprise in the bonded zone，which must clearly indicate the attribute of "processing reexport with imported materials"，Second，the trade mode on the customs declaration should be corrected to "processing reexport with imported materials"，and the exit port and transportation mode of the corresponding goods must be consistent with the actual situation，Third，the special VAT invoice and foreign exchange receipt voucher must form a closed loop with the goods value and receipt amount on the customs declaration.
In terms of core node connection，the declaration for exiting the bonded zone should be completed within 3 working days after the processing is completed，and the processing value-added accounting report should be submitted to the tax authority simultaneously to ensure that the processing value-added rate is not lower than the 15% standard stipulated by the customs，If a transit warehouse is involved，the goods storage voucher of the transit warehouse shall be provided to prove that the goods have not entered the domestic circulation link.
In terms of exception response plan，if the trade mode indicated on the customs declaration is wrong，you should apply to the customs for deleting and re-declaring the form within 10 working days after the goods depart，and update the corresponding information in the tax declaration system simultaneously，If you receive a tax inquiry，you shall submit a full set of supporting materials such as processing contracts，storage vouchers and foreign exchange receipt slips within 3 working days.
The final compliance implementation shall ensure **consistency of four flows** (contract flow，goods flow，capital flow，invoice flow)，and all documents shall be archived and retained for more than 5 years after the tax refund declaration is completed to avoid subsequent inspection risks.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
In the determination of tax refund qualification for processing reexport trade, the indication of trade mode on the customs declaration is the core review item. If the customs declaration is incorrectly marked as "pure reexport trade", the tax authority will directly determine that the goods have not undergone domestic processing and value addition, and the tax refund process cannot be triggered. It should be noted that for the customs declaration of processing reexport in the bonded zone, "reexport after value addition of processing with imported materials in bonded zone" shall be indicated in the "remarks column", and the processing filing manual number, exit means of transport number and other information shall be associated at the same time.
If the declaration has been completed but the marking is wrong, the *Application Form for Amendment/Cancellation of Customs Declaration* shall be submitted within 10 working days after the departure of the goods, accompanied by supporting materials such as the value-added accounting report of the processing enterprise and the exit voucher of the bonded zone. After passing the customs review, the corresponding data of the tax declaration system can be updated simultaneously to avoid the rejection of the tax refund application due to inconsistent declaration information.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The tax refund application for processing reexport trade shall meet the tax recognition standard of processing value addition, that is, the value addition of the domestic processing link shall account for more than 15% of the final FOB price of the goods. If the value-added rate fails to meet the standard, the tax authority will determine that the goods are only for simple storage and transit, and cannot enjoy the tax refund policy.
Enterprises can include all labor costs, equipment depreciation costs, auxiliary material procurement costs and other costs in the processing link into the value-added accounting scope by optimizing the processing process accounting method, and at the same time submit the *Processing Value-added Accounting Schedule* to the tax authority, clearly listing the proportion of each cost. In addition, if cross-border RMB settlement is adopted, it is necessary to ensure that the settlement currency and amount on the foreign exchange receipt voucher are completely consistent with those on the customs declaration, so as to avoid obstruction of tax refund review due to currency differences.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The tax refund compliance of processing reexport trade needs to focus on checking the closed loop of capital flow. If the funds flow directly from the overseas purchaser to the overseas supplier without passing through the domestic enterprise account, it will be determined by the tax authority as pure reexport trade and cannot apply for tax refund. It is necessary to establish a three-party capital flow closed loop of "overseas purchaser - domestic processing enterprise - overseas supplier", that is, the overseas purchaser pays the payment for goods to the account of the domestic processing enterprise, and the domestic processing enterprise then pays the procurement payment to the overseas supplier.
At the same time, the trade attribute of "processing reexport" shall be clearly indicated in the contract to avoid inconsistency between the capital flow and the trade attribute. In addition, the full set of SWIFT messages or CIPS payment vouchers shall be retained to ensure that each transfer of the capital flow is traceable, so as to avoid the rejection of the tax refund application due to non-compliant capital flow.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
The tax refund declaration of processing reexport trade shall strictly comply with the document filing requirements, and enterprises that fail to file as required will be suspended from tax refund qualification. The documents to be filed include: processing contract, bonded zone processing filing certificate, customs declaration, special VAT invoice, foreign exchange receipt voucher, processing value-added accounting report, goods exit certificate, etc. All documents shall be retained in both electronic and paper copies, and the retention period shall be no less than 5 years.
In case of tax audit, the full set of filed documents shall be submitted within 3 working days, and the logic between the documents shall be consistent. For example, the goods value on the customs declaration shall match the goods value on the special VAT invoice and the amount on the foreign exchange receipt voucher, and the processing content of the processing contract shall be consistent with the content of the bonded zone filing certificate. In addition, pre-declaration verification shall be carried out before the monthly tax refund declaration to timely troubleshoot the problem of inconsistent documents.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The goods inspection link of processing reexport trade is a hidden review item for tax refund qualification determination. If the on-site customs inspection finds that the goods have not undergone substantive processing, but only simple packaging or labeling, it will be directly determined as pure reexport trade and cannot enjoy the tax refund policy. After the processing is completed, the logo of the domestic processing enterprise shall be marked on the outer packaging of the goods, and supporting materials such as image data of the processing process, equipment use records, and labor attendance records shall be prepared for on-site customs inspection.
In case of unpacking inspection, special personnel shall be arranged to be present to cooperate, explain the processing flow and value-added links to the inspection personnel, and avoid inconsistent inspection conclusions due to poor communication. In addition, it is necessary to ensure that the transport seal of the goods is consistent with the seal number indicated on the customs declaration, so as to avoid being judged as abnormal goods flow due to inconsistent seals.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
The goods flow path of processing reexport trade is the core basis for tax refund review. If the goods are directly transported from overseas to the transit warehouse without entering the bonded zone for processing, it will be determined as pure reexport trade and cannot apply for tax refund.
It is necessary to ensure that the goods flow path is "overseas supplier - bonded zone processing enterprise - overseas purchaser", and the entry filing shall be handled when the goods enter the bonded zone, and the exit declaration shall be handled after the processing is completed. At the same time, the entry and exit goods list of the bonded zone shall be provided to prove that the goods have completed substantive processing in the bonded zone.
In addition, if transit transportation is involved, logistics enterprises with reexport trade qualification shall be selected to avoid invalid goods flow vouchers due to insufficient qualification of logistics enterprises. If the goods are detained in port, a detention explanation shall be submitted within 3 working days after the detention, and an application for extension of tax refund declaration shall be submitted to the tax authority simultaneously.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The contract terms of processing reexport trade are an important guarantee for tax refund compliance. If the trade attribute of "processing reexport" is not clearly indicated in the contract, but only marked as "reexport trade", the tax authority will not be able to identify the processing value-added link, and the tax refund cannot be applied for. The contract shall clearly stipulate the processing content, processing location (bonded zone), processing value-added rate, goods departure requirements and other clauses, and at the same time agree on the rights and obligations of the three parties (overseas purchaser, domestic processing enterprise, overseas supplier) to ensure that the contract flow is consistent with the goods flow, capital flow and invoice flow.
In addition, in case of contract disputes, relevant communication records, supplementary agreements and other materials shall be retained in time to avoid the suspension of tax refund application due to contract disputes. At the same time, it is necessary to ensure that the foreign exchange collection terms in the contract are consistent with the foreign exchange administration regulations, so as to avoid obstruction of tax refund review due to too long collection period.