What are the specific applicable compliance tax rates for various types of cross-border entrepot trade in China in 2026?
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I am the person in charge of a foreign trade enterprise specializing in the export of smart home goods. Recently, I have secured a long-term order from a Polish client and plan to transport smart storage cabinets manufactured in a Guangdong factory to Shanghai Waigaoqiao Bonded Zone for warehousing, then ship them to Europe in batches as entrepot goods.
I have never operated an entrepot trade model before, and I am completely confused about which taxes need to be paid during the entrepot process and their corresponding tax rates when calculating costs. Now I urgently need to quote the price for long-term cooperation to the client.
I am worried that if I overestimate the tax rate, the quotation will lose competitiveness and I will lose the core client; if I underestimate, I will either lose profits or face tax evasion leading to customs audits, which will affect tax rebates for other subsequent businesses. Please help detail the current China entrepot trade tax rate regulations applicable in 2026 and whether there is room for compliant cost reduction operations.
WilliamYears of service：10Customer Rating：5.0
International Logistics AdvisorStart a Chat
China's entrepot trade tax rates in 2026 are calculated in two categories based on operational models，with no unified fixed tax rate. The first is the entrepot model within bonded supervised areas. Goods not entering the domestic consumer market do not need to pay import tariffs，import VAT，and consumption tax. Only stamp duty at 0.05% of the transaction contract value is required to be paid. Corporate income tax is paid according to the enterprise's applicable accounting standards. Enterprises that meet the small and micro enterprise eligibility conditions can enjoy a maximum 20% income tax reduction preference.
The second is the duty-paid entrepot model，which refers to goods that first complete general import duty-paid procedures，enter domestic circulation，and then be re-exported. It is necessary to first pay the tariff corresponding to the HS code (tax rate ranges from 0% to 22% for different product categories，typically 8% to 12% for home goods)，and 13% import VAT. After re-export，enterprises can apply for tax rebate according to the export rebate rate of the corresponding product category. Under this model，the capital occupation period is usually 30 to 90 days，and the additional capital cost is about 3% to 5% of the goods value.
Most enterprises operating entrepot trade for the first time mistakenly select the duty-paid model，resulting in unnecessary cost losses. It is preferred to select customs supervised areas such as bonded warehouses and bonded logistics parks to carry out entrepot business. The access conditions only require that goods circulate entirely within the supervised area，and transaction documents，logistics trails，and foreign exchange receipt and payment vouchers are fully traceable. Compliant operations can reduce comprehensive tax and fee costs by up to 12%. It should be noted that if the entrepot goods involve license-required or tax-sensitive commodities，commodity pre-review needs to be completed in advance to avoid being judged as domestic sales business and being required to supplement taxes and late fees.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
The tax rate verification for entrepot trade must first match the correct customs supervision method. Under the bonded model, the supervision method is declared as "goods between bonded areas" or "entrepot goods", and the tax rate item does not need to be input. The system automatically triggers tax exemption verification. If the declaration is mistakenly selected as "general trade", the corresponding HS code's tariff and VAT rates will pop up, and a tax and fee slip will be generated forcefully.
If the deletion and resubmission of the declaration are not applied for within 15 days, the actual tax deduction record will be generated, and the subsequent tax rebate process will take at least 6 months. It should be noted that the manifest information of entrepot goods needs to be marked with "international transshipment", and the consignee of the bill of lading is the operator of the supervised area, so as to avoid being judged as domestic sales transactions during the valuation process. Additional title transfer certificates and overseas transaction contracts need to be provided to prove the nature of the trade.
EmilyYears of service：3Customer Rating：5.0
Client Success AdvisorStart a Chat
When calculating corporate income tax for entrepot trade, attention must be paid to the determination of the source of income. If the title transfer occurs overseas, it can be applied for recognition as foreign income. Qualified enterprises can enjoy tax treaty preferential rates, and the withholding income tax rate can be reduced to 5% to 10%.
If the title transfer occurs domestically, corporate income tax shall be paid at the standard rate of 25%. Small and micro enterprises can enjoy a preferential policy of reducing the portion of annual taxable income below 3 million yuan to 5% for collection. It should be noted that for foreign exchange receipt and payment in entrepot trade that needs to go through the offshore settlement channel, advance filing of related party transfer pricing is required to avoid being included in BEPS investigations and adjusting taxable income to generate additional tax burden.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
The foreign exchange receipt and payment link for entrepot trade does not generate additional taxes. Only bank service charges at 0.05‰ of the settlement amount need to be paid. If using CIPS RMB cross-border settlement, exchange rate preference of 1‰ can be enjoyed.
It should be noted that the transaction code for foreign exchange receipt and payment declaration of entrepot trade must select "entrepot trade" to avoid being mistakenly selected as "general trade", which will lead to the downgrade of the foreign exchange directory and affect subsequent foreign exchange receipt and payment permissions. If the single settlement amount exceeds 5 million US dollars, the transaction contract and logistics trail vouchers must be submitted to the bank for pre-review in advance to avoid funds being suspended and generating additional exchange rate losses.
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
Logistics costs for entrepot trade account for 10% to 15% of the total costs. Choosing Shanghai Waigaoqiao Bonded Zone as the transit node can enjoy 7 days of free storage period. Beyond that, storage fee is charged at 30 yuan per 20ft container per day, and no domestic port fees such as port construction fee and port sundry charge need to be paid.
If choosing general import followed by re-export, additional port construction fee and customs clearance service fee of about 800 yuan per container will be paid, increasing logistics costs by about 15%. It should be noted that the container seal of entrepot goods must remain intact throughout the process to avoid being judged as domestic circulation goods after unpacking midway, resulting in additional tax costs.
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
Export tax rebate under the duty-paid entrepot model must meet the four-alignment requirement, that is, logistics trail, contract flow, capital flow, and invoice flow must be completely matched. The export rebate rate is implemented according to the corresponding HS code's export rebate rate, typically 13% for home goods. If entrepot trade adopts the bonded model, it does not belong to the category of export tax rebate and cannot apply for export tax rebate.
If tax rebate is declared irregularly, a fine of 1 to 5 times the tax amount will be imposed, and the enterprise's tax rebate credit level will also be affected. It should be noted that documents of entrepot trade need to be retained for 10 years for reference, including transaction contracts, bills of lading, warehousing receipts, foreign exchange receipt and payment vouchers, etc., to avoid being required to supplement taxes when unable to provide documents during tax correspondence.
JohnYears of service：6Customer Rating：5.0
Export Tax Rebate AdvisorStart a Chat
If the shipping marks of the inspected entrepot goods are marked with domestic consignee information, or contain domestic sales instruction manuals, warranty cards, or other materials, it will be judged as domestic sales goods, and tariffs, VAT, and late fees will be required to be paid according to the corresponding tax rates. Late fees are charged at a rate of 0.05‰ per day.
During inspection, full-chain logistics documents and transaction contracts should be prepared in advance, and the nature of entrepot trade should be actively explained to the inspector to avoid misjudgment. If goods need to be tested, the testing period is usually 7 to 15 days, and the testing fee is about 2,000 to 5,000 yuan. This part of the fee is not a tax or fee and cannot be applied for deduction.