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What is the official definition of Vietnam transit trade? What are the core key links in practical operation?
or complex compliance issues.
clearance and fund security.
I am the head of an enterprise in Zhejiang specializing in hardware product export. I just signed a million-dollar order from the US last week, but the US imposes a 25% anti-dumping duty on hardware products originating from my company.
Calculations show that nearly 80% of the profit is directly swallowed up, and I am extremely anxious now. Peers in Guangzhou told me that I can adopt Vietnam transit trade to avoid this duty, but I have never been exposed to such operations, and I don't even know what Vietnam transit trade exactly means.
I am full of questions now: Can I ship the goods to the US just after transporting them to Vietnam and changing the packaging? Will it be found by US customs and determined as fraud? In addition, what documents do I need to prepare for specific operations, and will there be non-compliance problems leading to cargo detention?
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
Many foreign trade practitioners have cognitive misunderstandings about Vietnam transit trade，mistakenly believing that goods can be transshipped only after being transported to Vietnam，repackaged and labeled. This is an extremely risky operation.
If only superficial packaging changes are made without real transit process and compliant documents，the customs of target countries such as the US will directly determine it as origin fraud after discovery through traceability verification such as cargo barcodes and production batch numbers. Not only will the goods be detained and confiscated，but the enterprise will also be included in the trade blacklist of the importing country，and all subsequent orders will face a chain reaction of strict inspection or even entry prohibition.
The core measure for physical risk isolation is to complete the real warehousing and transit process in Vietnam. It is necessary to entrust a local compliant third-party logistics enterprise to unpack and repack the goods，and obtain formal documents such as the Certificate of Origin and commercial invoice issued by the Vietnamese authorities to ensure that the document information fully matches the goods transit process.
Exclusive loss stopping tip: Cooperate with institutions with more than 20 years of foreign trade agency experience in advance，conduct pre-audit on all transit documents，purchase transit logistics liability insurance at the same time，and reserve emergency funds equivalent to 5%-8% of the order amount to cope with possible customs inspection or document correction requirements.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The core of customs declaration for Vietnam transit trade lies in the verification of the authenticity of the Certificate of Origin. The customs will focus on comparing whether the manufacturer information and cargo specifications on the Certificate of Origin match the actual goods.
If a false Certificate of Origin is used, it will trigger the customs' price evaluation warning system during customs declaration and directly enter the secondary price evaluation process. You will not only be required to provide supporting materials such as the full logistics track of the goods and production records, but also may be traced for similar orders in the past 3 years, resulting in penalties such as tax repayment and fines.
In addition, the customs declaration form for the transit link must clearly mark "transit goods" to avoid being misjudged as local export goods of Vietnam and triggering the local export tariff collection and management process. When declaring customs, you need to prepare the original export declaration form of the goods, Vietnam transit warehousing agreement, cargo inspection report issued by a third-party inspection institution and other materials in advance to form a complete logical closed loop and reduce the risk of price evaluation disputes.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
For the logistics route of Vietnam transit trade, formal ports with transit qualification shall be selected, and priority shall be given to the bonded logistics parks of Ho Chi Minh Port or Haiphong Port. Such parks can provide one-stop unpacking, packing and warehousing services, and can enjoy a 7-14 day free storage period, effectively reducing the cost of container detention fees. The core of cargo right control is to adopt the indicative endorsement of the ocean bill of lading, and complete the legal transfer of cargo right in the transit link to avoid the goods being intercepted by a third party.
In case of abnormal situations such as space rolling and full capacity, you need to sign a transit standby space agreement with the logistics enterprise in advance to ensure that the goods can be transferred to other vessel schedules within 72 hours. In addition, during the transit process, the goods shall be tracked by GPS throughout the whole process, and on-site photos of warehousing and packing shall be taken regularly to retain logistics track evidence for the inspection of the target country's customs.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The core of taxation for Vietnam transit trade lies in utilizing the tariff rate under the bilateral trade agreement between Vietnam and the target country. It is necessary to check the tariff rate of the target country on goods of Vietnamese origin in advance to ensure that the transshipped goods can enjoy the preferential agreed tariff rate.
In addition, attention shall be paid to Vietnam's VAT deferral policy in the tax treatment of the transit link. If the goods are transshipped in the bonded logistics park of Vietnam, there is no need to pay Vietnam's export VAT, and only need to pay import tariff and VAT in accordance with the tax regulations of the target country when the goods are finally resold to the target country.
It is necessary to avoid processing and transformation of goods in Vietnam, otherwise they will be recognized as locally produced goods in Vietnam, and you need to pay Vietnam's value-added tax in the production link and corporate income tax, which greatly increases the transit cost. At the same time, you need to complete the pricing filing of cross-border related transactions in advance to ensure that the profit pricing of the transit link complies with BEPS rules and avoid triggering tax audits.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
The payment and collection of foreign exchange for Vietnam transit trade shall go through compliant cross-border payment channels, and the CIPS RMB cross-border payment system shall be given priority. It is forbidden to use offshore accounts for payment and collection of foreign exchange in the way of underground banks, otherwise it will trigger the compliance warning of the State Administration of Foreign Exchange. When paying and collecting foreign exchange, it is necessary to ensure that the capital flow is completely consistent with the document flow, that is, the payer is the buyer of the target country, the payee is the Vietnamese transit trading company, and then the Vietnamese company transfers the payment to the domestic enterprise, forming a complete capital chain.
In addition, you need to file for payment and collection of foreign exchange for transit trade with the State Administration of Foreign Exchange in advance, and submit materials such as the transit trade contract, Vietnam Certificate of Origin, and logistics bill of lading, to avoid being identified as illegal payment and collection of foreign exchange due to the inconsistency between the payment and collection subject and the trade subject, resulting in penalties such as foreign exchange account freezing and fines. In case of large exchange rate fluctuations, forward foreign exchange settlement and sale can be used to lock the exchange rate and reduce the risk of exchange difference.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
Three core contracts shall be signed for Vietnam transit trade: the goods entrusted transit contract between the domestic enterprise and the Vietnamese transit company, the sales contract between the Vietnamese transit company and the buyer of the target country, and the payment transfer agreement between the domestic enterprise and the Vietnamese transit company. The contract shall clearly stipulate the compliance clauses of the transit process, for example, the Vietnamese transit company shall ensure that the provided documents such as the Certificate of Origin are authentic and valid.
If the goods are detained due to false documents, it shall bear all cargo losses and fines. In addition, force majeure clauses shall be added to clarify the division of responsibilities and loss bearing methods of both parties if transit delay is caused by force majeure factors such as changes in local Vietnamese policies and port strikes. At the same time, the intellectual property rights of the goods shall be protected, and intellectual property rights filing shall be carried out with the Vietnamese customs in advance to avoid infringement or counterfeiting of the goods during the transit process.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The focus of on-site inspection for Vietnam transit trade lies in the consistency between the physical state of the goods and the documents. The Vietnamese customs will conduct random unpacking inspection on transit goods to check whether the specifications, brands and production batch numbers of the goods are consistent with the information on the customs declaration form and the Certificate of Origin. In case of inspection, you need to prepare the original factory inspection report of the goods, logistics packing list, transit warehousing agreement and other materials in advance to cooperate with the customs for inspection.
If there is slight packaging damage to the goods, you need to take photos at the inspection site for retention, and the local packaging enterprise in Vietnam shall issue a packaging replacement certificate to avoid being identified as damaged goods. In addition, it is necessary to ensure that the seals of the goods are formal customs seals, and avoid using ordinary commercial seals, otherwise it will trigger the customs fraud warning, leading to full-box inspection of the goods and increasing the risk of port detention.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
If domestic enterprises engaged in Vietnam transit trade want to apply for export tax rebate, they need to meet the requirement that the goods are truly exported to Vietnam, that is, they hold the ocean bill of lading and export declaration form from China to Vietnam, and the ownership of the goods has been transferred to the Vietnamese transit company when exported to Vietnam. It should be noted that goods under transit trade do not belong to "deemed self-produced goods" and cannot enjoy the expedited processing policy for export tax rebate.
They need to be declared in accordance with the conventional process, and submit materials such as export goods declaration form, special VAT invoice and transit trade contract. In addition, it is necessary to ensure the consistency of four flows, that is, the capital flow, document flow, goods flow and invoice flow are completely matched.
If there is capital backflow, document fraud and other situations, it will be identified as export tax rebate fraud by the tax authority. Not only will the rebated tax be recovered, but you will also face penalties such as fines and late fees. Before declaring the export tax rebate, you need to carry out pre-declaration verification in advance to check the inconsistencies in the documents and ensure that the audit is passed at one time.