Is Entrepot Trade Tax Evasion? You Might Have Misunderstood This Matter

When Mr. Zhang received an email from an American customer adding a $5 - million order, he stared at the computer screen and smiled bitterly - if these electronic products were exported directly, the tariff costs would devour all the profits. Three days later, the temporary warehouse he set up in Malaysia solved this problem. This is the magic of entrepot trade: it's like a "knight" on the chessboard of international trade, using a circuitous strategy to break through the dilemma.

Against the backdrop of a 17% year - on - year increase in global anti - dumping investigations in 2023, entrepot trade has changed from a marginal strategy to a mainstream choice. Ms. Li's furniture factory successfully avoided 62% of the EU anti - dumping duties through a transit point in Vietnam.

• Cost Optimization: Utilize free trade agreements of third countries to reduce tariffs
• Risk Avoidance: Bypass trade barriers and technological blockades
• Efficiency Improvement: Shorten the supply chain response time

Transit through Bonded Zones is the most common "light - mode". Goods only need to complete container - changing and document processing in the bonded zone. A certain auto parts manufacturer changed the place of origin of its products to an ASEAN country through the Singapore bonded zone, saving $3.9 million in tariffs. Simple Processing - based Entrepot Trade requires the completion of a value - added process of not less than 35% in the transit country. Mr. Wang's textile company obtained an ASEAN certificate of origin for its products by adding embroidery in Cambodia.

Virtual Entrepot Trade is more concealed. The physical flow of goods remains unchanged, and entrepot trade in the legal sense is completed only through bill of lading and letter of credit operations. This mode has extremely high requirements for the logistics system, but can save 15 - 20% of logistics costs.

In the solution designed for a certain machinery manufacturer, we found:

• Entrepot trade via Malaysia can reduce the impact of Sino - US trade frictions
• It is necessary to retain a complete chain of processing evidence
• The terms of the letter of credit from the transit country's bank need to be specially reviewed

In 2022, a certain photovoltaic enterprise was ordered to pay back 120 million yuan in taxes due to loopholes in entrepot trade documents. The risks mainly come from:

• Sudden changes in the origin certification standards of the transit country
• Bank letter of credit fraud
• Logistics information tracking disruption

With the advancement of the global Customs Data Sharing System (CDS), traditional entrepot trade models will face challenges. Intelligent entrepot trade solutions are beginning to integrate blockchain and AI technologies to achieve:

• Real - time tariff simulation calculation
• Automated matching of origin rules
• Dynamic risk warning system

Standing at the crossroads of international trade, every enterprise needs to think: should it continue to break through tariff barriers head - on, or take the "invisible viaduct" of entrepot trade? Can your enterprise's entrepot trade solution withstand the "microscope - like" review of the customs? Welcome to share your practical experience in the comment section.