The tax rates involved in entrepot trade are rather complicated and need to be considered on a case-by-case basis. Firstly, in terms of tariffs, since the goods don't enter the domestic customs territory, usually no import tariffs need to be paid. For example, if the goods are transported from Country A to Country B and only transshipped in the domestic country, the domestic customs will not levy import tariffs on these goods.
As for value-added tax, entrepot trade essentially belongs to service trade rather than goods sales and generally doesn't involve domestic value-added tax. However, if there are relevant auxiliary services during the entrepot trade process, such as agency services, etc., if they meet the provisions of value-added tax taxable activities, value-added tax shall be paid at the 6% tax rate for modern service industries.
Besides, in terms of enterprise income tax, the profits obtained from entrepot trade need to be included in the taxable income amount and paid at the income tax rate applicable to the enterprise. Generally, it's 25% for ordinary enterprises. Those that meet the preferential conditions such as small and low-profit enterprises shall apply the corresponding preferential tax rates.
Professional consultant answers
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
The tax rates involved in entrepot trade are rather complicated and need to be considered on a case-by-case basis. Firstly, in terms of tariffs, since the goods don't enter the domestic customs territory, usually no import tariffs need to be paid. For example, if the goods are transported from Country A to Country B and only transshipped in the domestic country, the domestic customs will not levy import tariffs on these goods.
As for value-added tax, entrepot trade essentially belongs to service trade rather than goods sales and generally doesn't involve domestic value-added tax. However, if there are relevant auxiliary services during the entrepot trade process, such as agency services, etc., if they meet the provisions of value-added tax taxable activities, value-added tax shall be paid at the 6% tax rate for modern service industries.
Besides, in terms of enterprise income tax, the profits obtained from entrepot trade need to be included in the taxable income amount and paid at the income tax rate applicable to the enterprise. Generally, it's 25% for ordinary enterprises. Those that meet the preferential conditions such as small and low-profit enterprises shall apply the corresponding preferential tax rates.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Entrepot trade doesn't involve import tariffs because the goods are not consumed in the domestic country. In terms of value-added tax, if it's just pure reselling of goods, indeed it doesn't involve value-added tax. But if there are relevant services, it shall be calculated according to the corresponding tax rate of the services.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
Tariffs are generally not levied because the goods don't actually enter the domestic customs territory. Enterprise income tax shall be paid at the normal tax rate. However, it should be noted that the cost accounting should be accurate, otherwise it will affect the taxable income amount.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
Entrepot trade basically doesn't involve tariffs. If value-added tax doesn't involve services and is just the reselling of goods, it doesn't need to be paid. But relevant transaction vouchers should be well kept to deal with tax inspections.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Tariffs are usually not applicable. If value-added tax involves services, it shall be paid at 6%. Don't forget enterprise income tax. It shall be paid at the tax rate applicable to the enterprise. It's very important to make compliant declarations.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
The tariff exemption in entrepot trade is due to the fact that the goods don't enter the customs territory. For value-added tax, it depends on whether there are services. If there are, it shall be calculated according to the service tax rate. Enterprise income tax shall be calculated and paid normally.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Tariffs are generally not collected in entrepot trade. If value-added tax is just for pure goods transshipment, it doesn't exist. If there are services, it shall be calculated according to the service tax rate. Enterprise income tax shall be paid normally.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
Entrepot trade doesn't levy tariffs. For value-added tax, if it's pure entrepot goods, it doesn't exist. If there are services, it shall be paid according to the stipulated tax rate. Enterprise income tax shall be calculated and paid normally.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
Entrepot trade generally doesn't have import tariffs. If value-added tax only involves the transshipment of goods and not services, it's not involved. If there are services, it shall be paid at 6% or other tax rates. Enterprise income tax shall be paid according to the regulations.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
For entrepot trade, tariffs are not involved. There is no value-added tax for goods transshipment. If it's related to services, it shall be calculated according to the corresponding tax rate. Enterprise income tax shall be paid normally.