What are the definitions, documents, and risks of omissions and errors involved in filling out the "transaction method" in the import and export declaration process?
In the import process:
1. CIF: refers to the transaction price including cost, insurance premium, and designated destination port freight. The customer focuses on verifying whether there are the following fees based on providing documents such as contracts, invoices, and packing lists:
▶▶ Demurrage fee: The actual cost incurred by the buyer at the loading port before unloading, whether directly or indirectly paid;
▶▶ Dispatch fee: It is necessary to distinguish whether it occurs "before unloading" or "after unloading" of imported goods, and for dispatch fee that occurs "after unloading", it cannot be deducted from the total freight;
▶▶ Transportation surcharges: such as fuel surcharges, emergency fuel surcharges, and low sulfur fuel surcharges, which are part of the shipping cost and occur before unloading at the input location;
▶▶ Terminal loading and unloading fee: For OTHC fee and THC generated at the transit port, it belongs to the transportation cost before loading and unloading at the input location.
2. C&F: Refers to the transaction price including cost and designated destination port freight, and the insurance premium is the responsibility of the buyer. On the basis of providing contracts, invoices, packing lists, insurance premium documents, etc., the customer focuses on verifying whether there are any demurrage, dispatch, transportation surcharges, dock loading and unloading fees.
3. FOB: The transaction price does not include transportation and insurance fees from the port of origin to the destination port, and the buyer is responsible for the transportation and insurance fees. On the basis of providing contracts, invoices, packing lists, freight invoices, insurance premium documents, etc., the customer focuses on verifying whether there are any demurrage, dispatch, transportation surcharges, dock loading and unloading fees.
4. EXW: The transaction price does not include freight and insurance fees, and the buyer is responsible for the freight and insurance fees. On the basis of providing contracts, invoices, packing lists, freight invoices, insurance premium documents, etc., the customer focuses on verifying whether there are any demurrage, dispatch, transportation surcharges, dock loading and unloading fees. Freight refers to the total amount of freight incurred before unloading goods from the delivery location within the exporting country to the input location within China.
In the export process:
1. CIF: Refers to the transaction price including insurance premium and designated destination port freight. The customer needs to provide the correct freight and insurance invoice while providing the contract and invoice packing list to meet the regulatory requirements of customs and taxation.
2. C&F: Refers to the transaction price including the designated destination port freight. The customer needs to provide the correct shipping invoice while providing the contract, invoice, and packing list to meet the regulatory requirements of customs and taxation.
3. FOB: Refers to delivery at the port of shipment, also known as "FOB price". The customer can provide the contract, invoice, and packing list.
4. EXW: Refers to the delivery of goods by the seller to the buyer at the factory or warehouse, and the seller is not responsible for loading the goods onto any means of transportation. According to Article 26 of the Import and Export Tariff Regulations of the People's Republic of China, the export dutiable price must include domestic transportation and related expenses, domestic insurance expenses, and relevant documents must be provided on the basis of the contract, invoice, and packing list.
What are the impacts of misreporting transaction methods
1. Causing underpayment of customs duties
According to the Measures of the Customs of the People's Republic of China for the Examination and Approval of Duty Paid Prices of Import and Export Goods: "The duty paid price of imported goods shall be determined by the customs based on the transaction price of the goods, and shall include the transportation and related fees, insurance premiums, and other related expenses before the goods arrive at the import location within the territory of the People's Republic of China and are unloaded. The failure to report transportation and related costs, as well as insurance premiums, resulted in the omission of import tariffs and value-added tax.
2. Causing customs statistical errors
According to the "Regulations on Customs Statistics of the People's Republic of China": "The price of imported goods shall be calculated based on the sum of the price of the goods, the transportation and related expenses before the goods arrive at the import location within the People's Republic of China, and the insurance premium." The declaration of EXW and FOB transaction methods as CIF resulted in the transportation and related expenses and insurance premium not being reflected in the declared price on the customs declaration form, which affected the accuracy of customs statistics.
3. Disrupting the order of customs supervision
The transaction method is an important content of the customs declaration form, and enterprises should strictly declare according to the actual situation. However, some enterprise personnel do not attach enough importance to the declaration of the transaction method, and insufficient communication disrupts the normal customs order.
Misreporting the transaction method will lead to subsequent customs inspections. Enterprises should also pay attention to declaration errors caused by improper filling of the "transaction method" to avoid customs compliance risks.
The above views only represent the author's personal views. If readers have different opinions or insights, please feel free to contact and exchange ideas.
