Our company plans to use an agency to import a batch of goods, but we are confused about the payment process. We have disagreements with the agency regarding who should handle the payment. I’d like to know how payment responsibility is generally defined in agency import business. Should it be the client or the agency? Is there any legal basis? We hope to receive a professional answer. Thank you.
The company has export agency business and is unsure how to calculate the stamp duty for export agency services, asking whether it is based on the contract amount or if there are other methods. The best answer states that the stamp duty for export agency is often calculated based on the amount stated in the export agency contract. If the contract separately records the agency fee and the goods amount, the stamp duty is calculated at the respective rates of 0.03% for different tax categories. If not separately recorded, the stamp duty is calculated at the "sales contract" rate of 0.03%. An example is provided, emphasizing that local tax regulations should be followed.
The company hires an agency company to handle export business. The goods have been exported, and the payment is about to arrive. There is a doubt about whether the payment should go to the agency company or the principal, as well as the relevant processes and precautions. The best answer indicates that the flow of the payment is determined by the agency agreement. Commonly, foreign customers first pay to the agency company, which then transfers the money to the principal after deducting agency fees and other expenses. The principal should clarify the settlement details in the agreement. The key is to execute according to the agreement and maintain communication.
The company has import business involving import agency fees and inquires whether VAT is payable, as well as the applicable tax rate and special regulations. The best answer states that import agency fees are generally subject to VAT, with a 6% rate for general taxpayers providing brokerage and agency services, and a 3% collection rate for small-scale taxpayers (subject to adjustment during preferential periods). For overseas agency services provided to domestic enterprises, withholding and remittance of VAT is required. Enterprises should maintain relevant documentation for tax compliance.
Our company plans to engage in entrepot trade but has doubts about tax collection during payment process, such as whether taxes are based on goods value proportion or other methods, and policy differences across regions. The best answer indicates that entrepot trade generally doesn't incur tariffs but may involve VAT, calculated as added value multiplied by applicable tax rate, with varying regional policies. It's advised to consult local tax authorities and keep transaction records before operation.
Just started involving in entrepot trade business and have doubts about the payment collection process. Want to learn about safe, convenient and compliant payment methods and key points to note. The best answer indicates common payment methods include Letter of Credit, T/T, Collection, etc. L/C is secure but involves complicated procedures; T/T can be divided into advance T/T and post T/T; Collection includes Documents against Payment and Documents against Acceptance. For payment collection, it's important to clarify contract terms, understand counterparty's creditworthiness and ensure compliant operations.
When importing goods through an agency company, a disagreement arises with the agency company during the payment stage, and it is unclear who should pay for the agency - imported goods. The best answer points out that there is no fixed model for the payment subject of the goods, and the key is to see the agreement between the principal and the agent in the agency - import agreement. Execute according to the agreement. If it is not clear, the two parties should reach an agreement through consultation as soon as possible to avoid disputes.
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Professional consultant answers
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
In agency import business, the payment party is usually determined by the terms of the agency import agreement. Generally, there are two common scenarios. If the agreement explicitly states that the client will handle the payment directly, then the client is responsible for the payment. This applies when the client has strong control over funds and is familiar with the payment process.
Alternatively, if the agreement specifies that the agency will handle the payment, then the agency is responsible. For example, the agency may have more resources and experience in international trade, making it more convenient for them to manage the payment.
From a regulatory perspective, relevant rules such as the Implementation Rules for Foreign Exchange Management in Goods Trade emphasize that payment responsibilities should be fulfilled according to the contract. In practice, both parties should negotiate and determine the payment party based on their circumstances, trade practices, and other factors, and clearly specify it in the agreement to avoid future disputes.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
It usually depends on mutual negotiation. If the client has a foreign exchange account and is proficient in operations, they can handle the payment themselves to better control the funds.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
Generally, the agency handles the payment more often because they are more professional in managing import processes, making the payment step smoother for them.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
If the client has strict fund management requirements and wants to control the payment directly, then the client should handle it, but they must ensure compliance with foreign exchange regulations.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
In some cases, the agency handles the payment first, and then the client reimburses the agency, which facilitates the agency’s arrangement of import matters.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
The key is to determine who is more convenient and capable of completing the payment. For example, if the agency has good credibility and strong bank relationships, the payment process may be more efficient.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
If the client has special payment requirements, such as specific settlement methods, they may need to handle the payment themselves to meet those needs.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
From an operational simplicity perspective, if the agency handles the entire import process, it’s more coherent for them to manage the payment as well.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Both parties should also consider the impact of foreign exchange policy changes and choose the party better equipped to handle such changes for payment.