In the multiplied process of international trade, tax handling is undoubtedly a complex issue that every enterprise must face. Especially the value added tax policy involving international goods transportation agency services, it is directly related to the cost control and profit space of the enterprise. About the value added tax policy of the service, in particular for customs, clearing customs, billing fees, check-in fees, terminal operating fees and other expenses, is the focus of concern for many enterprises.

Definition of goods transport agency services

According to the definition of the tax [2016] No. 36, goods transportation agent service refers to accepting the commission of the receiver of goods, dispatcher, ship owner, ship tenant or ship operator, in the name of the client, for the client to handle the transportation of goods, unloading, storage and related procedures such as ship entry and exit port, departure, landing and other business activities.

1.1 Specific content

Goods transport services include the following main elements:
1) The transport of goods:Includes the transport of goods by sea, air, road transport, rail transport and so on.
2) Delivery of Services:Loading and unloading of goods during transportation.
3) The storage services:Temporary or long-term storage of goods.
The Port Services:Including related procedures for the entry and exit of ships from ports, departure, landing, etc.

1.2 Related Regulations

The Notice of the State Administration of Taxation of the Ministry of Finance on the Comprehensive Implementation of the Pilot Procedure for the Implementation of the Value Added Tax (Fiscal Tax [2016] No. 36) clarifies the definition of goods transport agency services and their tax policies, providing the legal basis for actual business operations.

Value-added tax policy for international freight transport services

According to the provisions of the Treasury Tax [2016] No. 36, taxpayers provide international goods transportation agency services, including customs, clearance, loading and unloading and other business, and charge shipping fees to customers, customs clearance clearance preparation fees, domestic port booking fees, port operating fees and other fees, whether the policy of exemption from value added tax is applicable needs to be specifically analyzed.

2.1 Logistics assistance services

Logistics support services include airline services, port terminal services, freight passenger station services, rescue and rescue services, unloading and shipping services, warehousing and pick-up services. These services are frequently involved in international freight transport agency processes.

2.2 Brokerage services

Brokerage agency services refers to various types of brokers, intermediaries, agency services, including financial agents, intellectual property agencies, goods transport agencies, agency customs, legal agents, real estate intermediaries, professional intermediaries, marriage intermediaries, agency accounting, auctions and so on.
Goods transportation agency service refers to accepting the commission of the receiver of goods, the sender, the owner of the ship, the landlord of the ship or the ship operator, in the name of the client, for the client to handle the related procedures of transportation of goods, loading, storage and ship entry and exit port, departure, landing and other business activities.
Agent customs reporting service refers to the receipt of imported and exported goods and the business activities entrusted by the sender to handle customs reporting procedures.

2.3 Conditions for applying the VAT exemption policy

In accordance with Article 36 of the Tax Tax Act [2016], taxpayers who provide international goods transportation agency services can benefit from the VAT exemption policy, in particular, the conditions for the VAT exemption policy include:

(1) The taxpayer shall provide international freight transport agency services:That is, handling business activities related to the transport of goods, loading, storage and ship entry and exit ports, departure and landing.
(2) The service project specifies:Includes shipping charges, customs clearance charges, cabin charges in domestic ports, port operating charges, etc.

A. Attention in Practice

3.1 Income invoices

When the taxpayer provides goods transportation agency services, the income obtained from the provision of goods transportation agency services shall be issued in accordance with the provisions; in the period of the provision of transportation agency services for the handling of goods transportation, customs clearance procedures, logistics assistance and other business, the corresponding amounts shall be collected from the client and paid to other units (such as Hong Kong supplementary fees, etc.), which do not belong to the sales amount of the taxpayers provision of goods transportation agency services, and shall not be issued invoices to the client.

3.2 Accounts for joint venture operations

Where the taxpayer is a joint-venture goods transport agent, agent customs reporting, logistics assistant, the income obtained by the goods transport agent, agent customs reporting, logistics assistant shall be issued separately in accordance with the provisions, and the charges shall be issued in accordance with logistics assistant services.

3.3 Whether shipping fees and customs clearance fees are exempt from tax

For shipping charges, customs clearance charges, cabin charges in domestic ports, port operating charges and other charges, the VAT exemption policy must be judged according to the specific business circumstances. If these charges are incurred by the taxpayer during the provision of international goods transportation agency services and comply with the conditions of the above-mentioned VAT exemption policy, you can benefit from the VAT exemption.

When providing international goods transportation agency services, taxpayers need to clarify the nature and assignment of the charges, and to issue invoices and process taxes in accordance with the provisions of the tax [2016] No. 36.

(1) Shipping charges, customs clearance charges, cabin charges in domestic ports, port operating charges and other charges may be exempt from VAT policy if they are part of goods transportation agency services.
(2) When a taxpayer co-operates with several, they shall issue invoices separately and determine whether the VAT-exempt policy is applied according to the specific nature of the business.

By accurately understanding and applying relevant regulations, enterprises can rationally plan for taxation, reduce tax risks, and ensure the smooth running of business.