--- title: "What compliance procedures must be followed for tax filing of cross-border receipt and payment balances arising from transit trade?" description: "The practical operational difficulties of tax filing for transit trade receipt and payment balances often expose enterprises to compliance risks，especially when it comes to details such as cross-border document matching and exchange difference calculation，which are prone to false or omitted declarations. It is necessary to complete the preliminary document review first to ensure that the bills of lading，foreign exchange receipt and payment vouchers are fully consistent with the declaration data，..." url: "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html" language: "en" type: "Q&A" category: "Entrepôt Trade Q&A" datePublished: "2026-07-29" dateModified: "2026-07-29" brand: "Zhongshen Trading China" answerCount: 8 --- # What compliance procedures must be followed for tax filing of cross-border receipt and payment balances arising from transit trade? ## Question I am the head of a foreign trade enterprise focusing on Southeast Asian transit trade. Last week, we just completed three batches of natural rubber orders transshipped from Malaysia to the EU, and a trade balance of approximately USD 126,000 was generated after foreign exchange receipt and payment settlement. We have always entrusted an agency to handle tax filing before, but this time the agency reminded that there are new compliance requirements for transit trade balance tax filing in 2026. I am afraid that erroneous declaration will trigger tax inspection, which will not only require us to pay back overdue taxes and late payment fines, but also affect the subsequent cross-border receipt and payment quota, and even implicate the customs clearance of other normal orders. I have been too anxious to eat these days, and would like to ask how to file tax for this balance in compliance, what specific operating procedures there are, what documents need to be prepared in advance, and how to avoid common operational pitfalls. ## Answers ### Answer 1 — Best Answer First，the details of preliminary document review shall be completed: sort out the full set of transit trade documents，including transit bills of lading，cross-border foreign exchange receipt and payment slips，manifest information，and trade contracts，focus on checking the marking of "transshipment clause" on the bills of lading，ensure that the **transaction code on the foreign exchange receipt and payment slips is "121010"** (the exclusive code for transit trade receipts and payments)，and guarantee that the document amount，transaction subject are fully consistent with the declaration data. For the connection of core nodes，within **15 working days** after the completion of foreign exchange receipt and payment，you shall submit the transit trade cargo circulation information to the customs synchronously，and submit the Declaration Form for Cross-border Receipt and Payment Balance to the tax authority，so as to ensure real-time synchronization of data between the customs and taxation systems，and avoid declaration alerts caused by data delay. Contingency plans for anomalies shall be developed in advance: if there is inconsistent document information or system data error，you shall submit supplementary correction materials and the Business Situation Explanation within **3 working days**，and contact the tax commissioner for manual verification at the same time. Delayed declaration or concealment of data differences is strictly prohibited. For the final compliant implementation，you shall retain the full set of documents for no less than **7 years** for subsequent inspection by the tax authority，and establish an internal balance ledger at the same time，with each balance corresponding to clear business vouchers，to ensure the full process is compliant and traceable. **status:** accepted **Author:** Andy Guo **Date:** 2026-07-29 ### Answer 2 The core of the customs declaration side of transit trade balance tax filing is to ensure the logical closed loop between cargo circulation information and tax declaration data. You shall clearly mark the "transit trade" attribute during customs declaration to avoid being misjudged as general trade export, which leads to caliber deviation of tax declaration. If additional fees such as storage fees and agency fees are incurred at the transit port, such fees shall be included in the balance calculation scope, and the corresponding fee voucher number shall be marked in the "remarks column" of the customs declaration form to ensure that the customs data is consistent with the balance data of tax declaration. If the customs declaration data is inconsistent with the foreign exchange receipt and payment data, you shall complete the data correction within the amendment period of the customs declaration form. It is strictly prohibited to conceal the balance by splitting customs declaration forms, otherwise it will trigger joint inspection by the customs and tax authorities. **status:** suggested **Author:** Grace Wang **Date:** 2026-07-29 ### Answer 3 The generation of transit trade balance is often directly related to the cost accounting in logistics links, so the boundary between logistics costs and trade payments shall be accurately distinguished. When selecting a transit port, you shall confirm the charging standards such as storage fees and document exchange fees of the transit port in advance, and record such fees separately to avoid confusion with trade payments leading to balance calculation errors. At the same time, you shall ensure that the "shipper" and "consignee" information on the transit bill of lading is consistent with the subject of the trade contract. If endorsement and transfer of the bill of lading is involved, the endorsement voucher shall be retained as auxiliary material for balance calculation. If there is a time difference between foreign exchange receipt and payment caused by logistics delay, you shall submit the logistics delay certificate during tax filing to avoid being judged as an abnormal transaction due to the time difference. **status:** suggested **Author:** Linda Gao **Date:** 2026-07-29 ### Answer 4 Transit trade balance tax filing shall strictly follow the arm's length principle of cross-border taxation to ensure the rationality of the balance generation. If the balance is generated due to exchange rate fluctuation, you shall submit an exchange rate conversion explanation during declaration, and adopt the central parity rate of the central bank on the first day of the declaration month for conversion. It is strictly prohibited to adjust the balance with a self-defined exchange rate. If the balance is generated due to related party transactions, you shall prepare a related party transaction pricing explanation to prove that the pricing conforms to the market fair value standard, so as to avoid being judged as profit shifting by the tax authority. In addition, the tax authority has realized real-time data sharing with the State Administration of Foreign Exchange in 2026, so you shall ensure that the declared balance data is fully consistent with the foreign exchange receipt and payment data of the State Administration of Foreign Exchange, otherwise it will trigger a cross-border tax alert. **status:** suggested **Author:** Eric Zhou **Date:** 2026-07-29 ### Answer 5 Compliance of foreign exchange receipt and payment is the core prerequisite for transit trade balance tax filing, and you shall ensure that each foreign exchange receipt and payment is supported by corresponding trade background. When carrying out cross-border foreign exchange receipt and payment, you shall clearly mark "transit trade receipt and payment" in the SWIFT message or CIPS payment instruction to avoid being listed as a suspicious transaction by the foreign exchange authority. If the balance is generated due to foreign exchange receipt and payment handling fees, you shall calculate the handling fees separately and submit the bank handling fee vouchers during tax filing to ensure the accuracy of the balance data. In addition, you shall regularly sort out the cross-border foreign exchange receipt and payment ledger, and account for transit trade receipts and payments separately from general trade receipts and payments to avoid data confusion leading to tax filing errors. **status:** suggested **Author:** Jason Wu **Date:** 2026-07-29 ### Answer 6 The generation of transit trade balance shall have legal contractual basis, and you shall clearly agree on the cargo circulation path of transit trade, foreign exchange receipt and payment time, scenarios of balance generation and calculation methods in the trade contract. If the balance is generated due to quality adjustment of goods, you shall retain legal documents such as quality inspection reports and supplementary agreements signed by both parties as compliance certification materials during tax filing. In addition, you shall avoid agreeing on vague balance clauses in the contract, otherwise it will be recognized as non-compliant benefit transfer by the tax authority. If the balance cannot be calculated in time due to contract disputes, you shall submit the court mediation document or arbitration award as the compliance basis for delayed declaration. **status:** suggested **Author:** Daniel Xu **Date:** 2026-07-29 ### Answer 7 Transit trade is not within the scope of export tax rebate, so the tax filing boundary between transit trade and general trade shall be strictly distinguished, and it is strictly prohibited to mix transit trade balance into the export tax rebate declaration data. During internal audit, you shall establish a separate transit trade balance ledger, record the cause of generation, calculation basis and declaration status of each balance, to ensure that the ledger data is fully consistent with the tax declaration data. If there is confusion of fees between transit trade and general trade, you shall carry out fee allocation during audit, clearly divide the costs and revenues of the two types of businesses, so as to avoid tax filing errors caused by fee confusion and trigger correspondence verification of export tax rebate. **status:** suggested **Author:** Kevin Lin **Date:** 2026-07-29 ### Answer 8 The calculation of transit trade balance shall be integrated into the full-chain cost management of the supply chain, and the possible balance shall be estimated at the time of order initiation, including factors such as exchange rate fluctuation, logistics costs and transit port charges, and a standard process for balance calculation shall be developed in advance. When selecting transit suppliers, you shall give priority to partners with transparent quotations and clear charging standards to avoid balance calculation deviation caused by hidden costs. In addition, you shall establish a balance early warning mechanism. When the balance accounts for more than 5% of the total trade volume, start the internal review process in time to ensure the rationality of the balance generation and avoid key inspection by the tax authority caused by large amount of balance. **status:** suggested **Author:** Victor Sun **Date:** 2026-07-29 ## Related Categories - [Import Agency Q&A](https://www.sh-zhongshen.com/en/qa/cat-import-agency/) - [Export Agency Q&A](https://www.sh-zhongshen.com/en/qa/cat-export-agency/) - [Export Tax Rebate Q&A](https://www.sh-zhongshen.com/en/qa/cat-export-tax-rebate/) - [Customs Declaration Q&A](https://www.sh-zhongshen.com/en/qa/cat-customs-declaration/) - [Freight Forwarding Q&A](https://www.sh-zhongshen.com/en/qa/cat-freight-forwarding/) - [Forex Settlement Q&A](https://www.sh-zhongshen.com/en/qa/cat-forex-settlement/) - [General Trade Q&A](https://www.sh-zhongshen.com/en/qa/cat-general-trade/) ## Related Resources - [Trade Services](https://www.sh-zhongshen.com/en/services/) - [Trade Cases](https://www.sh-zhongshen.com/en/cases/) - [Trade Wiki](https://www.sh-zhongshen.com/en/wiki/) - [Trade Class](https://www.sh-zhongshen.com/en/guide/) - [Global Trade Services](https://www.sh-zhongshen.com/en/country/) ## Structured Data ```json [ { "@context": "https://schema.org", "@type": "QAPage", "inLanguage":"en", "isPartOf": { "@id":"https://www.sh-zhongshen.com/en/#website" }, "publisher":{ "@id":"https://www.sh-zhongshen.com/en/#organization" }, "mainEntity": { "@type": "Question", "name": "What compliance procedures must be followed for tax filing of cross-border receipt and payment balances arising from transit trade?", "text": "I am the head of a foreign trade enterprise focusing on Southeast Asian transit trade. Last week, we just completed three batches of natural rubber orders transshipped from Malaysia to the EU, and a trade balance of approximately USD 126,000 was generated after foreign exchange receipt and payment settlement. We have always entrusted an agency to handle tax filing before, but this time the agency reminded that there are new compliance requirements for transit trade balance tax filing in 2026. I am afraid that erroneous declaration will trigger tax inspection, which will not only require us to pay back overdue taxes and late payment fines, but also affect the subsequent cross-border receipt and payment quota, and even implicate the customs clearance of other normal orders. I have been too anxious to eat these days, and would like to ask how to file tax for this balance in compliance, what specific operating procedures there are, what documents need to be prepared in advance, and how to avoid common operational pitfalls.", "answerCount": 8, "upvoteCount": 3, "datePublished": "2026-07-29T17:19:05Z", "dateModified": "2026-07-29T17:19:05Z", "author": { "@type": "Person", "name": "Zhongshen Trading China", "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html" } ,"acceptedAnswer": { "@type": "Answer", "text": "First，the details of preliminary document review shall be completed: sort out the full set of transit trade documents，including transit bills of lading，cross-border foreign exchange receipt and payment slips，manifest information，and trade contracts，focus on checking the marking of "transshipment clause" on the bills of lading，ensure that the transaction code on the foreign exchange receipt and payment slips is "121010" (the exclusive code for transit trade receipts and payments)，and guarantee that the document amount，transaction subject are fully consistent with the declaration data. For the connection of core nodes，within 15 working days after the completion of foreign exchange receipt and payment，you shall submit the transit trade cargo circulation information to the customs synchronously，and submit the Declaration Form for Cross-border Receipt and Payment Balance to the tax authority，so as to ensure real-time synchronization of data between the customs and taxation systems，and avoid declaration alerts caused by data delay. Contingency plans for anomalies shall be developed in advance: if there is inconsistent document information or system data error，you shall submit supplementary correction materials and the Business Situation Explanation within 3 working days ，and contact the tax commissioner for manual verification at the same time. Delayed declaration or concealment of data differences is strictly prohibited. For the final compliant implementation，you shall retain the full set of documents for no less than 7 years for subsequent inspection by the tax authority，and establish an internal balance ledger at the same time，with each balance corresponding to clear business vouchers，to ensure the full process is compliant and traceable.", "upvoteCount": 3, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html#acceptedAnswer", "datePublished": "2026-07-29T19:00:20Z", "author": {"@type": "Person","name": "Andy Guo","url": "https://www.sh-zhongshen.com/en/team/andy-guo/"} } ,"suggestedAnswer": [ { "@type": "Answer", "text": "The core of the customs declaration side of transit trade balance tax filing is to ensure the logical closed loop between cargo circulation information and tax declaration data. You shall clearly mark the "transit trade" attribute during customs declaration to avoid being misjudged as general trade export, which leads to caliber deviation of tax declaration. If additional fees such as storage fees and agency fees are incurred at the transit port, such fees shall be included in the balance calculation scope, and the corresponding fee voucher number shall be marked in the "remarks column" of the customs declaration form to ensure that the customs data is consistent with the balance data of tax declaration. If the customs declaration data is inconsistent with the foreign exchange receipt and payment data, you shall complete the data correction within the amendment period of the customs declaration form. It is strictly prohibited to conceal the balance by splitting customs declaration forms, otherwise it will trigger joint inspection by the customs and tax authorities.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html#suggestedAnswer-2", "datePublished": "2026-07-29T18:53:47Z", "author": {"@type": "Person","name": "Grace Wang","url": "https://www.sh-zhongshen.com/en/team/grace-wang/"} } , { "@type": "Answer", "text": "The generation of transit trade balance is often directly related to the cost accounting in logistics links, so the boundary between logistics costs and trade payments shall be accurately distinguished. When selecting a transit port, you shall confirm the charging standards such as storage fees and document exchange fees of the transit port in advance, and record such fees separately to avoid confusion with trade payments leading to balance calculation errors. At the same time, you shall ensure that the "shipper" and "consignee" information on the transit bill of lading is consistent with the subject of the trade contract. If endorsement and transfer of the bill of lading is involved, the endorsement voucher shall be retained as auxiliary material for balance calculation. If there is a time difference between foreign exchange receipt and payment caused by logistics delay, you shall submit the logistics delay certificate during tax filing to avoid being judged as an abnormal transaction due to the time difference.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html#suggestedAnswer-3", "datePublished": "2026-07-29T18:43:05Z", "author": {"@type": "Person","name": "Linda Gao","url": "https://www.sh-zhongshen.com/en/team/linda-gao/"} } , { "@type": "Answer", "text": "Transit trade balance tax filing shall strictly follow the arm's length principle of cross-border taxation to ensure the rationality of the balance generation. If the balance is generated due to exchange rate fluctuation, you shall submit an exchange rate conversion explanation during declaration, and adopt the central parity rate of the central bank on the first day of the declaration month for conversion. It is strictly prohibited to adjust the balance with a self-defined exchange rate. If the balance is generated due to related party transactions, you shall prepare a related party transaction pricing explanation to prove that the pricing conforms to the market fair value standard, so as to avoid being judged as profit shifting by the tax authority. In addition, the tax authority has realized real-time data sharing with the State Administration of Foreign Exchange in 2026, so you shall ensure that the declared balance data is fully consistent with the foreign exchange receipt and payment data of the State Administration of Foreign Exchange, otherwise it will trigger a cross-border tax alert.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html#suggestedAnswer-4", "datePublished": "2026-07-29T18:39:27Z", "author": {"@type": "Person","name": "Eric Zhou","url": "https://www.sh-zhongshen.com/en/team/eric-zhou/"} } , { "@type": "Answer", "text": "Compliance of foreign exchange receipt and payment is the core prerequisite for transit trade balance tax filing, and you shall ensure that each foreign exchange receipt and payment is supported by corresponding trade background. When carrying out cross-border foreign exchange receipt and payment, you shall clearly mark "transit trade receipt and payment" in the SWIFT message or CIPS payment instruction to avoid being listed as a suspicious transaction by the foreign exchange authority. If the balance is generated due to foreign exchange receipt and payment handling fees, you shall calculate the handling fees separately and submit the bank handling fee vouchers during tax filing to ensure the accuracy of the balance data. In addition, you shall regularly sort out the cross-border foreign exchange receipt and payment ledger, and account for transit trade receipts and payments separately from general trade receipts and payments to avoid data confusion leading to tax filing errors.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html#suggestedAnswer-5", "datePublished": "2026-07-29T17:56:07Z", "author": {"@type": "Person","name": "Jason Wu","url": "https://www.sh-zhongshen.com/en/team/jason-wu/"} } , { "@type": "Answer", "text": "The generation of transit trade balance shall have legal contractual basis, and you shall clearly agree on the cargo circulation path of transit trade, foreign exchange receipt and payment time, scenarios of balance generation and calculation methods in the trade contract. If the balance is generated due to quality adjustment of goods, you shall retain legal documents such as quality inspection reports and supplementary agreements signed by both parties as compliance certification materials during tax filing. In addition, you shall avoid agreeing on vague balance clauses in the contract, otherwise it will be recognized as non-compliant benefit transfer by the tax authority. If the balance cannot be calculated in time due to contract disputes, you shall submit the court mediation document or arbitration award as the compliance basis for delayed declaration.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html#suggestedAnswer-6", "datePublished": "2026-07-29T17:47:44Z", "author": {"@type": "Person","name": "Daniel Xu","url": "https://www.sh-zhongshen.com/en/team/daniel-xu/"} } , { "@type": "Answer", "text": "Transit trade is not within the scope of export tax rebate, so the tax filing boundary between transit trade and general trade shall be strictly distinguished, and it is strictly prohibited to mix transit trade balance into the export tax rebate declaration data. During internal audit, you shall establish a separate transit trade balance ledger, record the cause of generation, calculation basis and declaration status of each balance, to ensure that the ledger data is fully consistent with the tax declaration data. If there is confusion of fees between transit trade and general trade, you shall carry out fee allocation during audit, clearly divide the costs and revenues of the two types of businesses, so as to avoid tax filing errors caused by fee confusion and trigger correspondence verification of export tax rebate.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html#suggestedAnswer-7", "datePublished": "2026-07-29T17:39:51Z", "author": {"@type": "Person","name": "Kevin Lin","url": "https://www.sh-zhongshen.com/en/team/kevin-lin/"} } , { "@type": "Answer", "text": "The calculation of transit trade balance shall be integrated into the full-chain cost management of the supply chain, and the possible balance shall be estimated at the time of order initiation, including factors such as exchange rate fluctuation, logistics costs and transit port charges, and a standard process for balance calculation shall be developed in advance. When selecting transit suppliers, you shall give priority to partners with transparent quotations and clear charging standards to avoid balance calculation deviation caused by hidden costs. In addition, you shall establish a balance early warning mechanism. When the balance accounts for more than 5% of the total trade volume, start the internal review process in time to ensure the rationality of the balance generation and avoid key inspection by the tax authority caused by large amount of balance.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-cross-border-receipt-payment-balance-compliant-tax-filing-flow.html#suggestedAnswer-8", "datePublished": "2026-07-29T17:19:05Z", "author": {"@type": "Person","name": "Victor Sun","url": "https://www.sh-zhongshen.com/en/team/victor-sun/"} } ] } }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ {"@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.sh-zhongshen.com/en/"},{"@type": "ListItem", "position": 2, "name": "Q&A", "item": "https://www.sh-zhongshen.com/en/qa/"},{"@type": "ListItem", "position": 3, "name": "Entrepôt Trade Q&A", "item": "https://www.sh-zhongshen.com/en/qa/cat-entrepot-trade/"} ,{"@type": "ListItem", "position": 4, "name": "What compliance procedures must be followed for tax filing of cross-border receipt and payment balances arising from transit trade?"} ] } ] ```