Main points of handling export tax rebate in EXW transaction mode

I. Basic concepts of EXW transaction mode

        EXW means that the seller is responsible for delivering the goods ready to the buyer at its location (i.e. workshop, factory, warehouse, etc.), but normally the seller is not responsible for loading the goods onto the vehicle prepared by the buyer or clearing the goods. The Buyer bears all the costs and risks of transporting the goods from the seller’s location to the intended destination.

        With the development of international trade, the transaction situation of EXW is gradually increasing, and EXW is also included in the transaction method of customs declaration, which is more convenient for enterprises to declare. However, under the transaction mode of EXW, due to the terms of trade in customs clearance, transport documents and other aspects of the agreement, Chinese exporters also have some confusion in the actual export tax refund, this paper will focus on these core elements for analysis.

II. Whether EXW exports can apply for export tax refund

        According to the definition and characteristics of EXW trade terms, the author from the qualification conditions, information flow, logistics and capital flow to judge whether tax refund can be carried out.

        Qualification conditions — goods with tax rebate rate: first of all, export commodities are commodities with tax rebate rate; Enterprises eligible for tax refund: enterprises that declare tax refund shall be eligible for tax refund.

        Information flow — Customs declaration information flow: customs declaration transaction method is EXW, and the consignor is an export tax refund enterprise; Filing documents flow: prepare relevant filing documents, take transport documents as an example, it is better to provide photocopies of the original bill of lading, so as to facilitate the examination and verification of the export tax refund administration authorities.

        Logistics — actual departure of the goods (with transport documents) : the goods have actually left the customs, which can be supported by transport documents mentioned in the customs declaration and filing documents; Entry into special areas (reflected by customs declaration documents without transport documents) : goods entering into special supervision areas or special supervision places where tax rebates can be obtained shall be supported by declaration documents such as customs declaration form and record list.

        Capital flow — foreign exchange collection: declare and collect foreign exchange for export tax rebate; Confirmed sales: confirmed sales of goods with export tax rebate.

III. Matters needing attention when EXW handles export tax rebate

        The above content seems easy, but in practice, the calculation of export tax refund and the filing documents in the export tax refund formalities are the matters that enterprises and export tax refund administration organs need to pay great attention to.

IV. Calculation of export tax refund under EXW

        Calculation method and conversion between EXW and FOB

        According to the calculation rules of export tax rebate, the tax rebate shall be calculated based on the FOB of the current export goods multiplied by the exchange rate of RMB. The conversion formula of FOB and EXW is: FOB=EXW+ freight of domestic segment + insurance of domestic segment (if necessary)+ customs clearance fee.

        According to incoterms, the difference between EXW and FOB is mainly in domestic shipping premiums and export customs clearance — the FOB seller delivers the goods to a carrier named by the buyer at a designated place and performs export customs clearance to complete the delivery. Therefore, if the customs declaration transaction is EXW, then the export tax refund on a FOB basis will be calculated by taking into account the freight, insurance and export declaration charges for the domestic segment, although these are not borne by the seller.

        Due to the particularity of EXW, the following two calculation methods can be selected:

        One is to calculate the tax refund based on the FOB of the current export goods multiplied by the exchange rate of RMB. The advantage of this method of calculation is stability; The disadvantage is that the domestic freight and premium not borne by Chinese export shippers are included in the export tax rebate, but in fact the domestic freight and premium are not the income of Chinese export enterprises, which is equal to the expansion of the calculation of export tax rebate, easy to cause national economic losses.

        The other is not to take FOB as the basis of export tax rebate, but to take EXW as the basis of export tax rebate, which better conforms to the reality of international trade and provides more accurate basis for the calculation of export tax rebate. The advantage of this calculation is that the national interest will not be damaged; But its disadvantage is to increase the management cost and burden, that is, the new export tax rebate calculation base.

        Information of freight, premium and incidental charges on the customs declaration form

        It should be noted that the customs declaration will also show the freight and premium information, but it reflects the freight and premium of the international section — according to the “Customs declaration of the People’s Republic of China import and Export Goods filling specifications”, the freight of the export declaration is the transportation cost of goods shipped to the export point of loading in China, The premium for an export declaration refers to the cost of insurance for the shipment of goods to the point of departure within the territory of our country for loading. It is not related to the calculation of tax refundable under the EXW term.

        For EXW terms, the domestic freight and premium information should be reflected in the column of “incidental expenses” in the declaration form. The “incidental expenses” column is defined in the “Specification for filling import and Export Goods Declaration Form of the Customs of the People’s Republic of China” : “Other than the reported transaction price, according to the relevant provisions of the Regulations of the People’s Republic of China on Import and Export Duties should be included in the customs value or should be deducted from the customs value. Please fill in either the total price or the rate of incidental expenses, indicate the mark of incidental expenses (the mark of incidental expenses’ 1 ‘indicates the rate of incidental expenses, and’ 3 ‘indicates the total price of incidental expenses), and fill in the corresponding currency code according to the “Currency code Table” stipulated by the Customs. The incidentals that should be included in the customs value shall be filled in as a positive or positive rate, and the incidentals that should be deducted from the customs value shall be filled in as a negative or negative rate. Duty-free goods management units dealing in export tax refund domestic goods are exempted from reporting.”

V. Record documents for handling export tax rebate formalities under EXW

        Since the export transportation and customs clearance procedures are handled by the buyer, the shipping documents are also obtained by the buyer. As the seller applying for export tax rebate, there are certain difficulties in obtaining the shipping documents. At the same time, according to the definition of incoterms, the customs clearance procedures are also arranged by the buyer. The following will be export customs declaration, export transport documents and other aspects of the analysis.

        Who will handle export customs declaration?

        According to EXW trade terms, the buyer should arrange the export list, but in order to facilitate the export tax rebate consideration, the buyer and the seller usually agree in advance that the seller will assist the customs declaration and handle the export declaration procedures in the name of the seller, that is, the seller acts as the shipper on the export goods declaration form.

        Why is it difficult for the Chinese shipper to get the original bill of lading?

        Because the importer (buyer) charter booking, bill of lading documents consignor (SHIPPER) is usually a foreign buyer or a third person designated by the buyer, the carrier to the bill of lading documents SHIPPER’s instructions, at the same time, it will be the bill of lading to consignor of the bill of lading documents, namely the foreign buyer, so China’s exporters are difficult to get the original bill of lading under EXW term.

        How do you view FCR documents?

        Forwarders Certificate of Receipt (FCR) is not a transport document but only a Receipt Certificate. A freight forwarder issues an FCR as an agent, not as a carrier. Therefore, the nature of the FCR document itself as a cargo receipt rather than a transport document, and the status of the issuer of the FCR as an agent rather than a carrier, determine that it cannot replace the presentation (transport) document as a record document.

        In this case, the export tax rebate administration agency can require the exporter to provide warehousing certificate, CLP-Container Load Plan, FCR forwarder receipt and a series of logistics supplementary documents, forming a relatively complete export information chain, to make up for the challenge of not having a photocopy of the original bill of lading.

        How to deal with the bill of lading?

        One is to clarify whether there is a bill of lading. Under EXW trade terms, there are often export owners who report that there is no bill of lading, but the fact is that the buyer arranges booking space (chartering a ship) and signs a transport contract with the carrier. Therefore, in EXW export, the buyer is the shipper of documents. After the goods are loaded on board, the carrier issues the bill of lading and gives it to the owner (buyer) through the agent. Some freight forwarders also issue FCR(Freight forwarder receipt) to the seller. It can be seen that in the EXW term, the bill of lading exists.

        The second is to clarify whether the Chinese shippers can get the bill of lading. In practice, it is indeed difficult for Chinese owners to obtain the original bill of lading. However, the bill of lading in the record document is not the original bill of lading, but a photocopy of the correct bill of lading. For photocopies, Chinese shippers should actively obtain them through negotiation with foreign buyers and communication with freight forwarders.

        Third, Chinese shippers as exporters need to make it clear that Chinese laws protect domestic shippers (sellers of goods) — freight forwarding enterprises shall not damage the legitimate bill of lading rights of sellers of goods as shippers on the grounds that there is no contractual relationship between them.

VI. Advice to export sellers under the EXW term

        First, the seller and the seller agree to assist customs clearance;

        Export declaration formalities shall be completed in the name of the seller, and the seller shall be the consignor on the export declaration form;

        Third, it is agreed that the buyer shall provide the photocopy of the original transport document to the seller to facilitate the latter’s export tax refund.

Article source:Xiao er of customs affairs

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Fujian Quanzhiu Zhongtai IMP. AND EXP. CO., LTD. » Main points of handling export tax rebate in EXW transaction mode

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