Connect & Solve
Trade Q&A
What Are Other Compliant Operations and Value-Added Paths for Transit Trade Besides Avoiding Anti-Dumping Duties?
or complex compliance issues.
clearance and fund security.
I am the head of a foreign trade enterprise based in Shanghai mainly engaged in the export of hardware tools. Last month, we just used transit trade to avoid the 22.5% anti-dumping duty imposed by the EU on hardware tools from China, but the whole process was full of twists and turns: first, the certificate of origin provided by the third-party supplier in the transit country nearly got the cargo detained due to non-compliant format, and last week we received a demurrage bill from the freight forwarder, with an extra 23,000 yuan spent due to the 3-day delay in customs declaration at the transit port.
Now I am both relieved and anxious. I only know that transit trade can avoid duties, but I have no clue about other aspects of transit trade—for example, whether we can reduce end-to-end costs through reasonable planning, what compliant value-added profit models exist, and what hidden risks we have not noticed. After this exhausting experience, I don't want to treat transit trade as just an emergency measure, but want to turn it into a stable compliant path, and I am so worried that I can't even eat well.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
First，let's analyze the cost drawbacks of traditional transit trade: most enterprises only focus on avoiding anti-dumping duties and blindly choose unqualified freight forwarders，resulting in a 10%-20% premium on logistics miscellaneous fees，and fail to review third-party documents in advance，which easily leads to port detention，cargo detention and fines，and ties up capital costs. Taking your hardware tools order as an example，the 23,000 yuan demurrage fee this time is an avoidable cost caused by the omission of document review at the transit port.
Next，let's introduce cost optimization and value-added paths: First，make use of VAT deferment policy in the transit country. By 2026，core transit countries such as Malaysia and Singapore have opened VAT deferment channels for compliant transit goods，eliminating the need to pay import VAT in advance，which can release about 10%-15% of the cargo value funds and reduce capital occupation costs，Second，complete transit receipts and payments through the CIPS (Cross-Border Interbank Payment System) RMB cross-border payment system to avoid the risk of US dollar exchange rate fluctuations. By 2026，the coverage rate of CIPS in Southeast Asian transit countries has reached 92%，which can save about 1%-2% of exchange difference costs，Third，link up with supply chain resources in the transit country，transfer part of the simple assembly links of hardware tools to the transit country，and enjoy local processing trade tax preferences to further reduce costs.
Regarding access threshold assessment，enterprises need to have qualified suppliers in the transit country，complete logistics trails of transit goods，and real trade background. Zhongshen can provide exclusive pre-qualification services for transit suppliers. The dynamic income ratio calculation shows that based on your enterprise's annual export of 50 million yuan worth of hardware tools，the annual cost savings after optimization can reach 600,000 to 800,000 yuan，while improving compliance by 90%.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Customs declaration for transit trade must strictly follow the "two-time declaration" rule: declare the goods as "transit goods" when they enter the transit country, and declare them as general trade goods with "origin in the transit country" when they exit. In 2026, the General Administration of Customs upgraded the transit trade customs declaration audit system, focusing on verifying the logistics trail, document consistency and authenticity of trade background of transit goods. If there are deviations in the goods description, weight and value between the customs declaration form, bill of lading and certificate of origin of transit goods, it will trigger valuation disputes.
In mild cases, customs clearance will be delayed; in severe cases, it will be认定 as false transit trade, requiring the repayment of anti-dumping duties plus fines. In addition, the valuation of transit goods must be based on the fair market price in the transit country, and shall not be lower than 70% of the price of similar goods, otherwise it will be认定 as underreporting of price, and the price consultation process will be initiated, which can delay customs clearance for up to 10 days or more.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
For the logistics path of transit trade, give priority to ports with "Free Trade Zone (FTZ)" qualifications. In 2026, Port Klang, Port of Singapore and Port of Laem Chabang in Southeast Asia have opened exclusive FTY yards for transit goods, enjoying a 7-14 day free detention period without paying demurrage fees. In addition, the right of goods control shall adopt the "order bill of lading (To Order)", and the domestic enterprise shall hold the bill of lading endorsement right to prevent the transit country suppliers or freight forwarders from disposing of the goods without authorization.
If you need to change the transit port, submit a port change application to the shipping company 72 hours in advance and update the customs declaration documents synchronously, otherwise the shipping company will charge a port change fee equivalent to 1%-2% of the cargo value. At the same time, choose freight forwarders with exclusive logistics channels for transit trade to avoid mixed loading of goods with ordinary goods and trigger inspection risks.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
The tax planning of transit trade must comply with the requirements of BEPS (Base Erosion and Profit Shifting) Action 13 Report. By 2026, more than 140 countries around the world have joined the BEPS framework, and the profit attribution of transit trade must match the actual business activities.
If all profits of transit trade remain in the domestic market, it will be认定 as profit shifting and trigger tax audits. In addition, the VAT deferment policy in the transit country must meet three conditions: first, the goods do not enter the domestic market of the transit country; second, there is a clear customs declaration form of the final destination country; third, the logistics trail of transit goods is traceable.
If the conditions are not met, you will be required to pay back VAT plus late payment fees, with a late payment fee rate of 0.05% per day. At the same time, you can optimize profit distribution and reduce the overall tax burden by setting up an offshore company in the transit country.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
The receipts and payments of transit trade must strictly follow the "three flows consistency" principle, that is, the consistency of fund flow, cargo flow and document flow. In 2026, the State Administration of Foreign Exchange (SAFE) upgraded the cross-border payment and receipt monitoring system, focusing on verifying the time difference, amount difference and authenticity of trade background of transit trade receipts and payments.
If the time difference between payment and receipt exceeds 30 days and no reasonable explanation is provided, the enterprise will be included in the key foreign exchange monitoring list, affecting the subsequent payment and receipt quota. In addition, you can complete transit receipts and payments through the CIPS RMB cross-border payment system, without the need for foreign exchange purchase and settlement operations, to avoid exchange rate fluctuation risks.
At the same time, the message parsing of the CIPS system can automatically match customs declaration documents, improving compliance. If you use an offshore account for receipts and payments, ensure that the capital flow of the offshore account is consistent with the transit trade documents to avoid being认定 as illegal fund transfer.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
Three core clauses must be clearly defined in the transit trade contract: First, the ownership transfer clause of the transit country supplier, which shall stipulate that the ownership of the goods at the transit port always belongs to the domestic enterprise until the goods are loaded and shipped to the final destination country; Second, the force majeure clause, which shall clarify the responsibility division for force majeure events such as political unrest and port strikes in the transit country, to avoid cargo losses caused by force majeure; Third, the document authenticity clause, which shall stipulate that the documents such as certificate of origin and bill of lading provided by the transit country supplier must be true and valid, and the transit country supplier shall bear full responsibility for cargo detention and fines caused by false documents. In 2026, Incoterms 2026 has made clear provisions on the transfer of goods ownership in transit trade, and it is recommended to adopt the FCA (Free Carrier) trade term to clarify the ownership transfer point.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
Focus on the authenticity of seals during on-site inspection of transit goods at the transit port. In 2026, customs have adopted electronic seals instead of traditional paper seals, and the number of electronic seals can be queried in real-time through the customs system to prevent tampering. If container stripping inspection is triggered, prepare documents such as packing list, certificate of origin and transit trade contract in advance, and cooperate with customs inspectors to check the goods description, weight and quantity of the goods to avoid cargo detention caused by inconsistent documents and goods.
In addition, the packaging of transit goods shall be marked with the transit country's identification to avoid being认定 as direct export goods and triggering anti-dumping duty investigations. If the customs requires inspection, submit the inspection application within 3 days and update the customs declaration documents synchronously, and the inspection report can be obtained within 7 days to complete customs clearance.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
Transit trade does not fall within the scope of export tax rebates, but it should be noted that the document filing for transit trade shall be managed separately from that for domestic export goods to avoid confusion. In 2026, the State Taxation Administration upgraded the export tax rebate audit system, focusing on verifying the "four flows consistency" (fund flow, cargo flow, invoice flow and contract flow) of domestic export goods.
If the documents for transit trade are mixed with those for domestic export goods, it will trigger tax letter investigations and affect the rebate progress of domestic export goods. In addition, if the transit trade goods are part of the domestic export goods, the costs and income of transit goods shall be accounted for separately to avoid including the costs of transit goods in the costs of domestic export goods, which will lead to inflated export tax rebate amounts and trigger tax audits. At the same time, retain all documents of transit trade for at least 5 years for tax verification.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The supply chain structure of transit trade shall be linked with domestic production and inventory. In 2026, the global supply chain fluctuates greatly. It is recommended to adopt the "pre-positioned inventory + transit trade" model, that is, pre-position part of the hardware tools inventory in the FTZ warehouse of the transit country.
When orders from the final destination country are received, the goods can be shipped directly from the FTZ warehouse of the transit country, shortening the delivery cycle and reducing logistics costs. In addition, establish a cost accounting model, including logistics fees, document fees, VAT costs and exchange difference costs of transit trade, to calculate the costs of different transit paths in real-time and select the optimal path.
At the same time, establish long-term cooperative relationships with suppliers in the transit country to enjoy more favorable logistics fees and document fees, further reducing costs. In addition, regularly evaluate the supply chain risks of transit trade and establish emergency plans to avoid supply chain disruptions caused by policy changes and port strikes in the transit country.