The non - taxation of re - export trade is mainly based on the following principles. First, from the perspective of tax jurisdiction, taxation is usually based on the territorial principle or the personal principle. In re - export trade, the goods do not enter the country's customs territory, are not actually consumed, produced, etc. in the country, and are not within the scope of the country's tax jurisdiction based on the territorial principle. For example, if goods from country A are re - exported to country C via country B, the goods only stay briefly in country B and do not substantially change their status to enter the market circulation of country B. It is difficult for country B to tax them based on the territorial principle.
Secondly, in terms of the nature of trade, re - export trade mainly takes advantage of geographical location, trade convenience, etc. to earn a price difference, rather than obtaining profits from the country's substantive trade operations. If it is taxed, it may affect the status of the re - export trade center and hinder trade circulation. However, although the goods in re - export trade are not subject to customs duties, the profits obtained by enterprises from re - export trade may still be subject to corporate income tax and other taxes in some regions.
Professional consultant answers
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
The non - taxation of re - export trade is mainly based on the following principles. First, from the perspective of tax jurisdiction, taxation is usually based on the territorial principle or the personal principle. In re - export trade, the goods do not enter the country's customs territory, are not actually consumed, produced, etc. in the country, and are not within the scope of the country's tax jurisdiction based on the territorial principle. For example, if goods from country A are re - exported to country C via country B, the goods only stay briefly in country B and do not substantially change their status to enter the market circulation of country B. It is difficult for country B to tax them based on the territorial principle.
Secondly, in terms of the nature of trade, re - export trade mainly takes advantage of geographical location, trade convenience, etc. to earn a price difference, rather than obtaining profits from the country's substantive trade operations. If it is taxed, it may affect the status of the re - export trade center and hinder trade circulation. However, although the goods in re - export trade are not subject to customs duties, the profits obtained by enterprises from re - export trade may still be subject to corporate income tax and other taxes in some regions.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
The reason why re - export trade isn't taxed is that the goods are not landed, processed, or sold in the country. For example, if goods are bought from abroad and directly transshipped to other countries without entering the country's consumption link, there is no need to pay taxes such as consumption tax, which is levied on domestic consumption.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
The non - taxation of re - export trade is an international practice. To promote free trade and encourage the development of re - export trade hubs, many countries and regions have tax incentives for this part of trade. Not taxing can reduce the costs of enterprises and attract more trade business.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
Since the goods in re - export trade do not enter the country's customs territory and are not involved in the regular trade processes supervised by the country's customs, there is no need to pay customs duties, which is the direct reason for non - taxation.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
The non - taxation of re - export trade is related to its trade process. The goods are directly transported from the exporting country to the importing country. The home country is only a transit point and no actual value - added links occur, so many taxes do not need to be reported.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Non - taxation is to simplify the process. If re - export trade has to file tax returns, the procedures are complex. Not taxing can speed up the flow of goods and improve trade efficiency.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
The non - taxation of re - export trade can highlight the advantages of the country as a trade transit point, attract more enterprises to use the country for re - export business, and promote local trade prosperity.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
From the cost perspective, not taxing reduces the costs of enterprises engaged in re - export trade, making enterprises more competitive in the international market and conducive to the development of re - export trade.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
Since the physical location of the goods in re - export trade does not stay and consume in the domestic market, based on the principle of tax fairness, not taxing them is in line with the actual trade situation.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Non - taxation is to prevent double taxation. The goods may have already paid relevant taxes in the exporting country. Not taxing in the re - export link can avoid re - taxation and reduce the burden on enterprises.