In foreign trade, you may be confused about shipment processes under EXW (Ex Works, Factory Delivery) terms and related financial and customs issues.

The receipt of foreign customers U.S. money or foreign yuan, direct shipment to the customers specified domestic receipt address

Is it feasible:

• Feasibility analysisIn this case, the customer’s domestic agent may directly arrange logistics and pay customs duties, however, this practice presents some risks and problems:
  • Foreign exchange nuclear issueYou have received foreign exchange, but you can’t sell foreign exchange without your company’s rise in tariffs.
  • Problem of tax refundIf there is no customs report, it cannot be handled.Export tax refund。

The recommendation:

• Modification of provisionsCommunicate with customers to change EXW to FOB terms, or at least make sure your company is charged as a sender.This ensures you can apply for foreign exchange sales and export refunds.
• Method of CustomsYou can tax yourself or the goods specified by the customer on behalf of your company, so you can ensure that you receive foreign exchange and complete the sale and tax refund.

Customers domestic agent or friend pays RMB, you send to the domestic designated place

Considered as domestic sales:

• Internal processingIn this case, if a domestic agent or friend directly pays RMB, then the transaction should be treated as a domestic sale. The domestic sale transaction needs to be treated in accordance with the domestic sales process, and the VAT invoice (sales item invoice) is issued.

Sale of invoices:

• Driving TicketsIf the payer is a domestic individual or company and cannot receive VAT invoices, it is recommended:
  • Personal paymentsIf personally paid, you can not issue VAT invoices, but to ensure compliance and avoid the risk of money laundering.
  • Companies payIf a logistics company pays for it and needs to issue an invoice, it can issue a service invoice of 6% instead of a VAT invoice of 13%.

Comprehensive recommendations

Adjustment and operating regulations:

• Changes to FOB: It is recommended to change EXW to FOB terms and ensure that your company pays customs as the sender. This not only solves the issue of foreign exchange sales, but also ensures compliance with export refunds.
• Customs and Nuclear DisposalEven if the terms are EXW, you should ensure that the goods are declared in your company’s name. You can communicate with the customer to ensure that the goods are declared in your name, or through a third party.

Internal sales processing and invoicing:

• Internal transactionsIf the transaction is indeed domestic sales, it is necessary to handle the domestic sales process and issue the corresponding VAT invoice.
• Raise the bills.Ensure that the invoice is in line with the actual payer and avoid issuing to individuals or companies who cannot receive VAT invoices.

Communication and Coordination:

• Communicating with clients.Communicate these issues in detail with customers to make sure they understand and agree to your operating plan.
• Coordination with FinanceWork closely with the company’s financial department to ensure that all operations comply with financial and tax regulations and avoid legal and compliance risks.

Through these measures, it is possible to ensure that operations under the EXW terms comply with foreign trade and financial requirements, avoid problems with foreign exchange sales and tax refunds, while ensuring the legality and compliance of domestic sales transactions.