Our company recently plans to start entrepot trade business, having previously focused on general trade. We're not very familiar with the tax policies regarding entrepot trade. Could someone advise whether entrepot trade qualifies for export tax rebates? If not, what tax issues are involved in entrepot trade? We hope professionals can help clarify the tax differences between entrepot trade and general trade.
The company intends to carry out entrepot trade business and inquires whether entrepot trade can enjoy export tax rebates and the relevant conditions. The best answer points out that entrepot trade usually cannot enjoy export tax rebates. Because export tax rebates are refunds of domestic production and circulation taxes for domestically produced export goods, while entrepot trade goods are not produced in the country and have not paid taxes in the country, which do not meet the basic conditions for tax rebates.
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Professional consultant answers
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
Entrepot trade generally doesn't qualify for export tax rebate policies. This is because entrepot trade refers to transactions where goods are not directly sold between producing and consuming countries but through a third country. In this process, goods don't physically enter or exit domestic customs territory, nor undergo substantial value-added processing domestically, thus failing to meet the basic requirements for export tax rebates regarding "goods exported and leaving the country with domestic VAT and consumption tax already paid".
Main tax issues in entrepot trade include: Corporate income tax - profits from entrepot trade must be included in taxable income; Stamp duty - contracts for entrepot trade must pay stamp duty as required. Compared with general trade where goods physically leave the country and may qualify for export tax rebates, entrepot trade enjoys no such benefits.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
Entrepot trade indeed doesn't qualify for export tax rebates since goods don't undergo substantial domestic processing. Companies should pay attention to contract signing and ensure stamp duty payment to avoid tax risks.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
While entrepot trade doesn't qualify for tax rebates, companies must accurately calculate costs and income for corporate income tax purposes to avoid overpayment or underpayment issues.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
No tax rebates. Besides income tax and stamp duty, companies should ensure compliance in fund flows to avoid suspicion of unreasonable transactions by tax authorities.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
Entrepot trade doesn't qualify for export tax rebates. Companies should maintain proper business documentation for potential tax audits to prove transaction authenticity.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
No export tax rebates apply to entrepot trade. Companies must file tax returns truthfully, especially for corporate income tax, avoiding improper practices to reduce tax payments.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Entrepot trade doesn't involve export tax rebates. Though stamp duty rates are low, companies should pay as required to avoid greater losses.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
While entrepot trade has no export tax rebate invoice requirements, companies should ensure proper issuance and acquisition of relevant invoices for compliance.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
Entrepot trade definitely doesn't qualify for tax rebates. Companies must strictly differentiate its tax treatment from general trade to prevent tax risks from improper handling.