Generally, no import duties are required to be paid in transit trade. Transit trade means that the country of production of the goods and the country of consumption of the goods do not directly buy and sell the goods, but conduct the goods trading through a third country. The goods are transported from the country of production to the third country, without undergoing substantial processing in the third country (keeping the original state of the goods), and then transported to the country of consumption. Since the goods are not consumed within the territory of the transit country but only in transit, the transit country usually does not levy import duties.
For example, a certain Chinese enterprise A buys coffee beans from Brazil and instead of transporting them directly to China, transports them to Singapore. After being temporarily stored in the bonded warehouse in Singapore, they are transshipped to Japan and sold to Japanese enterprise B. In this process, as Singapore is the place of transit trade and the goods do not enter the Singaporean market for sale, Singapore will not levy import duties on this batch of coffee beans. However, if the goods are substantially processed in the transit country, changing the basic characteristics of the goods, etc., import duties and other related taxes may be involved.
Professional consultant answers
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Generally, no import duties are required to be paid in transit trade. Transit trade means that the country of production of the goods and the country of consumption of the goods do not directly buy and sell the goods, but conduct the goods trading through a third country. The goods are transported from the country of production to the third country, without undergoing substantial processing in the third country (keeping the original state of the goods), and then transported to the country of consumption. Since the goods are not consumed within the territory of the transit country but only in transit, the transit country usually does not levy import duties.
For example, a certain Chinese enterprise A buys coffee beans from Brazil and instead of transporting them directly to China, transports them to Singapore. After being temporarily stored in the bonded warehouse in Singapore, they are transshipped to Japan and sold to Japanese enterprise B. In this process, as Singapore is the place of transit trade and the goods do not enter the Singaporean market for sale, Singapore will not levy import duties on this batch of coffee beans. However, if the goods are substantially processed in the transit country, changing the basic characteristics of the goods, etc., import duties and other related taxes may be involved.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
The reason why no import duties are paid in transit trade is that the goods are only in transit and the transit country does not regard them as items for domestic import and consumption. Like many free trade ports, the transit of goods is very convenient, which benefits from the policy of not levying import duties and promotes the development of transit trade.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
Transit trade does not pay import duties. However, if some service fees are generated due to warehousing, etc. when the goods stay in the transit country, this has nothing to do with import duties and is just a normal commercial service charge.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
If the goods in transit trade are damaged, lost, etc. in the transit country, the handling has nothing to do with import duties either. It mainly depends on the transportation contract and insurance agreement.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
To determine whether import duties should be paid in transit trade, the key is to look at the state of the goods in the transit country. As long as they do not enter the local market for circulation, import duties will basically not be levied.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
In transit trade, if the transit country of the goods is a special area such as a bonded port area, import duties will be even less likely to be levied, which can greatly reduce the operating costs of enterprises.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
Since transit trade does not pay import duties, enterprises should pay attention to keeping relevant vouchers of goods in transit, such as bills of lading, warehousing records, etc., for inspection.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
For transit trade, if the transit country levies import duties, it will increase the trade costs and is not conducive to the development of transit trade. Therefore, most countries do not levy them.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
Even if the goods in transit trade are subject to simple packaging or other minor treatments in the transit country, as long as the essence of the goods is not changed, import duties are usually not levied either.