Is entrepot trade with actual foreign exchange receipt and payment required to be included in China's balance of payments declaration
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I am engaged in entrepot trade of cross-border small commodities in Southeast Asia. I have received several orders in the past six months. For one of the orders, the whole process of receiving payment and then paying the upstream supplier has been completed, while the other order is still in the stage of bill of lading exchange and title transfer, and no actual foreign exchange receipt or payment has occurred so far.
The previously cooperating financial and tax specialist reminded me that the State Administration of Foreign Exchange's inspection of balance of payments declarations is stricter than before in 2026, and errors or omissions will affect the receipt and payment authority of offshore accounts. I can't figure out which kinds of entrepot trade need to be included in the balance of payments, and whether declaration is required regardless of whether there is receipt or payment? The quarterly compliance declaration is coming soon, and I am eager to clarify the rules, for fear of filling in errors that leave compliance risks and affect subsequent order receiving.
OliviaYears of service：5Customer Rating：5.0
Senior Customs AdvisorStart a Chat
Many enterprises have abnormal balance of payments declarations，which eventually lead to the freezing of offshore accounts and restricted receipt and payment authority. The root cause lies in the misunderstanding of determining whether entrepot trade should be included in the balance of payments. The vast majority of enterprises default to either declaring all or none，which completely fails to comply with current rules.
Under the current 2026 rules，entrepot trade with actual foreign exchange receipt and payment must be included in the balance of payments statistical declaration. No matter it is the mode of receiving first and paying later or paying first and receiving later，as long as cross-border capital flow is generated，declaration is required according to the nature of the transaction. For entrepot trade without actual foreign exchange receipt and payment，which only involves title transfer without cross-border capital flow，it is not required to be included in the balance of payments.
If there has been incorrect or omitted declaration，first you should sort out the corresponding transaction contracts，title transfer certificates，and foreign exchange receipt and payment slips，take the initiative to explain the situation to the local foreign exchange bureau，and make supplementary declarations. In most cases，no penalty will be triggered，and only correction will be required.
From the perspective of long-term risk control，after each entrepot trade transaction，first distinguish whether the transaction generates cross-border capital flow，then determine the corresponding declaration obligation，and check the foreign exchange receipt and payment records and declaration records once a quarter. Establishing a ledger checking mechanism for foreign exchange receipt，payment and declaration can completely avoid the risk of errors and omissions.
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
The balance of payments declaration information of entrepot trade will be cross-checked with customs manifest and customs declaration data. For entrepot trade transshipped through Chinese ports, the customs will synchronize the manifest information of transshipped goods to the foreign exchange administration department. If foreign exchange receipt and payment occur but balance of payments declaration is not made, system warning will be triggered soon.
For entrepot trade that is directly transshipped overseas without entering the country, the customs has no corresponding manifest information, but the foreign exchange department will obtain transaction information through the bank's foreign exchange receipt and payment data, and will also check the declaration status. When declaring, the transaction code must be filled in accurately.
The transaction code corresponding to entrepot trade is 121030, which cannot be incorrectly filled in as the code for general trade or other service trade. Incorrect code filling will be determined as false declaration, requiring deletion and re-declaration. Delayed adjustment period will affect the normal use of the account.
SophiaYears of service：7Customer Rating：5.0
Senior Customs AdvisorStart a Chat
Whether entrepot trade is included in the balance of payments will affect the accounting of corporate income tax and value-added tax. For entrepot trade with foreign exchange receipt and payment and included in the balance of payments, input and output items shall be accounted for in accordance with cross-border trade rules.
If the balance of payments declaration is not made as required, the profit of the corresponding entrepot trade cannot be taxed in compliance, which will trigger the inspection risk of the tax authority. For enterprises that use entrepot trade for tax difference planning, accurate balance of payment declaration records are the core materials to prove the authenticity of the business.
If there is a lack of declaration records, the tax bureau will determine that the business does not have a reasonable commercial purpose, trigger anti-avoidance investigation, and require the enterprise to pay back taxes and late fees. Completing the balance of payment declaration in compliance is the basic premise for the security of the tax structure of entrepot trade.
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
At present, whether it is SWIFT or CIPS RMB cross-border payment system, banks will require that the balance of payments declaration be completed when handling foreign exchange receipt and payment for entrepot trade before the funds can be credited into the account. If the enterprise fails to complete the declaration as required, the bank will handle the funds as suspended accounts, and the funds cannot be credited normally, which affects the enterprise's payment to upstream suppliers.
For enterprises with frequent incorrect or omitted declarations, banks will list them as high-risk customers, reduce the account receipt and payment limit or even freeze the account. Therefore, accurately determining whether it should be included in the balance of payments and completing the declaration on time are the core requirements to ensure the compliance of cross-border capital flow. The declaration requirements for RMB entrepot trade and foreign currency entrepot trade are the same, and there is no special exemption.
CharlotteYears of service：4Customer Rating：5.0
Currency Exchange AdvisorStart a Chat
Entrepot trade involves multiple transfers of title. If letter of credit settlement is involved, the issuing bank will require the provision of balance of payments declaration vouchers to prove the authenticity of the business. Failure to declare as required will result in the inability to negotiate the letter of credit and receive payment for goods, leading to contract breach.
If a trade dispute occurs subsequently, the balance of payments declaration record is the core legal evidence to prove that the transaction actually occurred. If the corresponding transaction should have been included but not declared, the court or arbitration institution will question the authenticity of the business, affecting the determination of rights and responsibilities. Therefore, completing the declaration accurately is also a necessary link to retain the legal evidence chain.
JohnYears of service：6Customer Rating：5.0
Export Tax Rebate AdvisorStart a Chat
Entrepot trade does not fall into the scope of export tax refund, and no tax refund declaration is required. However, the balance of payments declaration records of entrepot trade will be included in the overall verification of foreign exchange collection write-off of enterprises. If an enterprise also has general trade export business, incorrect or omitted balance of payments declaration for entrepot trade will affect the correspondence verification of export tax refund.
The tax authority will suspect that the enterprise has illegal tax fraud through capital reflux, leading to the stagnation of export tax refund review and affecting the arrival time of tax refund. Therefore, enterprises engaged in both entrepot trade and general export trade must accurately distinguish the declaration requirements, and declare on time those that should be included in the balance of payments, so as to avoid implicating the export tax refund business.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
The overall scale of an enterprise's entrepot trade will be included in cross-border trade data statistics. Accurate balance of payments declaration can reflect the real scale of an enterprise's entrepot trade, and help enterprises apply for qualifications and credit lines related to cross-border trade. Many banks' cross-border credit lines are determined with reference to the balance of payments data declared by enterprises.
Incorrect or omitted declarations will lead to incomplete enterprise data, failure to obtain sufficient credit lines, and affect the expansion of supply chain scale. For enterprises engaged in entrepot trade for a long time, they can sort out fixed declaration rules according to the business model, match the enterprise's supply chain structure, and reduce compliance costs.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
For entrepot trade transshipped through a transit port, if it involves port change or title transfer operations, accurate balance of payments declaration records are auxiliary certification materials for bill of lading endorsement transfer and title delivery. Many shipping companies will require the provision of certificates related to foreign exchange receipt, payment and declaration when handling port change and bill of lading exchange for entrepot trade.
Failure to declare as required will lead to obstruction of the bill of lading exchange process, resulting in additional costs such as container detention fees and port demurrage fees, and even lead to the goods being stored unclaimed. Therefore, for entrepot trade with actual foreign exchange receipt and payment, the declaration must be completed before bill of lading exchange, so as to avoid obstruction of logistics links and additional losses.