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What exactly does the total amount of entrepot trade refer to? What amounts from transaction links are included in statistics?
or complex compliance issues.
clearance and fund security.
I am the head of a small enterprise engaged in entrepot trade in Southeast Asia. The customs declaration data I submitted last week was rejected because the statistical caliber of the total entrepot trade amount did not meet the requirements, which also delayed the subsequent foreign exchange settlement.
I am extremely anxious now. I used to think that the total amount of entrepot trade only refers to the buying and selling price difference of goods, but the customs said that transit storage fees, international logistics fees and other items should also be included? I am completely confused.
I not only have no idea what the total amount of entrepot trade exactly refers to, but also am afraid that this mistake will leave a bad record, affecting subsequent customs clearance and fund receipt and payment. I would like to ask you to help me figure it out thoroughly, including the statistical scope, the difference with the value of transit trade, and how to calculate it accurately to meet the customs requirements.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
Many enterprises engaged in entrepot trade have a common cognitive misunderstanding: they mistakenly believe that the total amount of entrepot trade only refers to the buying and selling price difference of goods，ignoring various compliant fees in the transit link.
This wrong cognition will trigger a chain of negative reactions: first，it will lead to inconsistency between declaration data and customs statistical caliber. In minor cases，the declaration will be rejected for modification，delaying the foreign exchange settlement time limit by 1-3 working days，in severe cases，it will trigger customs risk control early warning，the enterprise will be listed as a key verification object，subsequent goods customs clearance may face priority inspection，and even lead to port detention，temporary supervision of receipt and payment accounts.
Physical risk isolation measures should start with the statistical caliber: the total amount of entrepot trade refers to the sum of all compliant amounts in the entire chain of entrepot transactions，covering goods purchase price，resale price，transit storage fees，international logistics fees，agency service fees，etc。but excluding taxes such as value-added tax in domestic links.
Exclusive Loss Prevention Tips: Before formal declaration，collect all documents such as transaction contracts，bills of lading，invoices，check them one by one against the customs statistical caliber，verify through the customs pre-declaration system，confirm the data is consistent before submission. At the same time，retain all documents for no less than 5 years for subsequent verification.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
In the customs declaration link, the declaration of the total amount of entrepot trade must strictly match the caliber requirements in the Customs Statistics Regulations, and statistical categories shall not be adjusted without authorization. If items such as transit storage fees and logistics fees are omitted during declaration, the customs valuation system will automatically trigger a data anomaly early warning. At this time, you need to supplement and submit fee vouchers within 3 working days, including storage agreements, logistics invoices, etc., otherwise you will be required to delete the declaration and resubmit.
If the declaration is inconsistent for many times, the enterprise's customs declaration credit rating will be downgraded, and subsequent customs clearance will be included in the key valuation scope, and even a deposit is required to release the goods. In addition, the total amount of entrepot trade needs to form a logical closed loop with the amount of foreign exchange receipt and payment, that is, the total declared amount should be basically consistent with the total amount of foreign exchange received and paid, and the error shall not exceed 5%, otherwise it will trigger compliance verification of cross-border capital flows.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
From the perspective of logistics chain, the statistics of the total amount of entrepot trade need to correspond one-to-one with the fee vouchers of logistics nodes. Storage fees, container detention fees, port operation fees, etc. incurred during transit shall be included in the statistical scope of the total amount of entrepot trade. The invoices for these fees shall be marked with "for transit only", and the shipper and consignee on the bill of lading shall be consistent with the buyer and seller in the entrepot trade contract.
If the logistics fees are not included in the total amount statistics, the proportion between goods value and logistics costs will be unbalanced, triggering customs verification of the authenticity of goods ownership. In addition, when selecting a transit port, priority should be given to ports that support "one-stop customs clearance for entrepot goods". Such ports will uniformly issue compliant vouchers for transit fees, which is convenient for enterprises to accurately count the total amount, and at the same time can avoid statistical omissions caused by scattered logistics documents.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
From the perspective of international taxation, the calculation of the total amount of entrepot trade needs to distinguish between taxable and non-taxable items to ensure compliant tax handling. In the process of entrepot trade, the goods do not enter the domestic market of the transit country, so domestic taxes such as value-added tax and consumption tax of the transit country do not need to be included in the total amount statistics; however, for cross-border service fees such as international logistics fees and storage fees, if they are collected by enterprises in the transit country, it is necessary to confirm whether withholding income tax has been deducted and paid, and relevant taxes shall not be included in the total amount of entrepot trade.
In addition, when enterprises carry out related-party entrepot trade, they need to ensure that the total amount of entrepot trade conforms to the arm's length principle, that is, the pricing should be consistent with the price of non-related party transactions, otherwise it will be recognized as profit shifting by the tax authorities, triggering a transfer pricing investigation, requiring tax payment and late payment fines.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
In the cross-border foreign exchange receipt and payment link, the total amount of entrepot trade needs to form a corresponding relationship with the amounts in SWIFT messages and CIPS payment vouchers. When paying foreign exchange, enterprises need to indicate "entrepot trade payment" or "entrepot trade service fee" in the postscript, and split the total amount of entrepot trade into goods value and fee items for separate declaration; when receiving foreign exchange, it is necessary to ensure that the difference between the received foreign exchange amount and the declared total amount of entrepot trade is within a reasonable range, generally not exceeding 3% of the contract amount.
If the amount of foreign exchange receipt and payment is inconsistent with the declared total amount, the foreign exchange administration will list it as a suspicious transaction, requiring the submission of transaction background information, and even suspend the enterprise's cross-border foreign exchange receipt and payment authority. In addition, entrepot trade funds received by offshore accounts need to be declared for foreign-related income in China simultaneously to ensure the consistency of total amount data.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
From the legal perspective, the total amount of entrepot trade needs to be clearly agreed in the contract to avoid subsequent disputes. The contract shall list the goods purchase price, resale price, transit storage fees, logistics fees and other amounts separately, and the total amount is the total amount of entrepot trade.
It shall also clarify the payment method and time node of all fees. If the composition of the total amount is not clearly specified in the contract, once a dispute arises between the buyer and the seller, it will lead to difficulty in proof, and even need to be resolved through arbitration or litigation.
In addition, the clause that "total amount statistics are consistent with customs caliber" shall be added to the contract to ensure that both parties have a unified understanding of the total amount and avoid breach of contract risks caused by inconsistent declaration requirements. At the same time, all contracts and documents related to entrepot trade shall be retained as the basis for subsequent legal rights protection.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
In the on-site customs inspection link, the declared data of the total amount of entrepot trade will be checked against the actual situation of the goods. If the declared total amount only includes the value of goods, and on-site inspection finds that the goods have traces of transit storage (such as secondary seals, storage labels), but storage fees are not included in the total amount, the customs will determine that the declaration is untrue, requiring the enterprise to supplement fee vouchers on the spot, otherwise the goods will be moved to the supervision warehouse for further verification, resulting in additional port detention fees and storage fees.
In addition, if the total amount of entrepot trade deviates greatly from the market price of the goods, the customs will start the price questioning procedure, requiring the enterprise to provide information such as goods purchase contracts, invoices, market quotation reports. At this time, it is necessary to ensure that the amount of all information is consistent with the declared total amount to avoid price adjustment by the customs.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
From the perspective of export tax refund audit, the total amount of entrepot trade shall not be included in the calculation base of export tax refund, because entrepot trade goods do not actually enter the domestic market and do not meet the conditions for export tax refund. If the enterprise mistakenly includes the total amount of entrepot trade into export sales volume, it will lead to abnormal tax refund declaration data, triggering tax correspondence, requiring the enterprise to provide all documents of entrepot trade, including bills of lading, contracts, foreign exchange receipt and payment vouchers, etc., to prove that the goods have not entered the domestic market.
In addition, documents of entrepot trade shall be kept separately from documents of export goods to avoid confusion, otherwise it will affect the audit progress of export tax refund, and even lead to the rejection of tax refund applications. At the same time, in the value-added tax declaration, the total amount of entrepot trade shall be declared as "cross-border taxable behavior", and shall not be confused with domestic sales behavior.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
From the perspective of supply chain planning, the statistics of the total amount of entrepot trade can be used to optimize the transit cost structure. By analyzing the proportion of each expense item in the total amount, links with high costs can be identified.
For example, if the proportion of transit storage fees is too high, the cost can be reduced by signing long-term agreements with storage enterprises in the transit port; if the proportion of international logistics fees is too high, a more economical logistics route can be selected, such as switching to transit shipping schedules instead of direct shipping schedules. In addition, the statistical data of the total amount of entrepot trade can also be used to evaluate the profitability of entrepot trade.
By comparing the composition of the total amount in different transit markets, select transit nodes with lower costs and higher efficiency to improve the competitiveness of the overall supply chain. At the same time, a dynamic monitoring mechanism for the total amount shall be established, regularly compared with the industry average, and cost control strategies shall be adjusted in a timely manner.