How to Correctly and Compliantly Declare and Pay Customs Duties for Goods Undergoing Transshipment in Hong Kong Re-Export Trade
Importing from China?
Need help with sourcing, customs or shipping?
Your China Import Partner
Reliable sourcing and import agency services.
I am a small and medium-sized foreign trade exporter specializing in home furnishing exports from the Pearl River Delta. Recently, I received two European purchase orders requiring transshipment via Hong Kong with container splitting, then delivering to two different end buyers respectively. I have only done direct shipping exports before and never operated re-export trade.
Last time, I tried to ship a small batch but the goods were detained by Hong Kong Customs due to incorrect declaration, I paid a lot of late payment surcharges and the sailing schedule was delayed, almost losing the customer. Now the bulk goods are ready, I am confused: if the goods only transit through Hong Kong without entering local sales, do I need to declare customs duties?
If yes, what standard is the tax calculated by? How should I fill in the country of origin to enjoy corresponding tariff preferences? I urgently need to figure out the correct operation process to avoid further problems.
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
The most common misconception in the industry is that goods only transiting through Hong Kong without entering the local market do not require any customs duty declaration and can be directly treated as "transit goods". Many small and medium-sized exporters make this mistake，triggering Hong Kong Customs' regulatory alerts，leading to goods detention and port congestion，not only generating high container detention charges and late payment surcharges，but also delaying the destination port sailing schedule，triggering customers' breach of contract compensation，and leaving a violation record，making all subsequent goods transiting through Hong Kong be listed as key inspection objects，long-term affecting the enterprise's re-export operations via Hong Kong.
The core of physical risk isolation is to clearly define the transit nature of goods in advance: Goods that only transit without entering the Hong Kong market only need to declare transit to Hong Kong Customs，no import customs duties are required. If there is transfer of title，container splitting and re-dispatch，or entering Hong Kong warehousing for transit beyond the specified 14-day time limit，customs duty pre-declaration operations must be completed in accordance with regulations.
If it involves resale to third parties，the country of origin declaration rules must be clarified，Hong Kong cannot be directly marked as the country of origin，otherwise it will lead to incorrect customs duty calculation for the destination country，triggering anti-dumping investigation risks. Exclusive loss prevention tip: If goods have already been detained due to non-compliant declaration，provide a complete set of title documents and transit agreements to apply for supplementary declaration to the customs immediately，in most cases，only corresponding fees need to be paid before release，no additional fines are required. Keeping a complete set of transit trade contracts in advance can isolate most subsequent risks.
EmilyYears of service：3Customer Rating：5.0
Client Success AdvisorStart a Chat
For goods transiting through Hong Kong re-export, the core focus of the customs valuation phase is the actual transaction value of the goods. If it is only transit transshipment and no actual transaction has occurred on the goods, it can be declared for valuation according to the original invoice value; if transfer of title has occurred, the corresponding transfer contract and transaction price must be provided. Hong Kong Customs will determine the dutiable value according to the transaction value method. If the declared price is obviously low without reasonable grounds, a price consultation procedure will be initiated.
For country of origin declaration, the original certificate of origin must be provided, and the country of origin information cannot be changed at will. If it involves third-party resale, the origin information must still be consistent with the original factory certificate, otherwise it will trigger abnormal valuation, leading to customs clearance delay. For cases where errors are found after declaration is completed, an application for cancellation and re-declaration can be submitted before the goods are released to correct the information and avoid leaving a violation record.
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
For goods transiting through Hong Kong re-export, different transit schemes correspond to different customs duty declaration requirements. If direct transit is selected, the goods do not enter Hong Kong warehousing and are directly transshipped alongside the ship, only need to mark transit goods on the bill of lading, no additional customs duty declaration is required.
If container splitting and consolidation are needed for re-dispatch, the goods need to enter Hong Kong container terminal or bonded warehousing, a transit declaration guarantee must be provided to the shipping company in advance, and the transit plan must be reported to the customs at the same time. The free detention period can be applied for to avoid excess port congestion charges. When endorsing the bill of lading, the transit attribute of the goods must be clearly marked to ensure that the transfer of title information is consistent with the declaration information, to avoid declaration anomalies due to inconsistent bill of lading information.
CharlotteYears of service：4Customer Rating：5.0
Currency Exchange AdvisorStart a Chat
Hong Kong itself is a free port, most imported goods do not require import customs duties, only a very small number of categories such as tobacco and alcohol, hydrocarbon oils, methanol and other special goods will be levied customs duties. Therefore, even if goods enter Hong Kong for transit, as long as they are not taxable categories, no customs duties are required even after entry declaration.
If it involves tariff planning for destination countries such as the EU, using Hong Kong re-export for VAT deferral, it is necessary to ensure that the transit process of goods meets the tax requirements of the destination country, retain a complete set of transit transaction documents to deal with tax verification from the destination country. For cross-border related party transaction re-exports, it is necessary to comply with the arm's length principle to avoid triggering BEPS-related tax base erosion investigations.
OliviaYears of service：5Customer Rating：5.0
Senior Customs AdvisorStart a Chat
The foreign exchange receipt and payment of Hong Kong re-export trade must match the corresponding customs duty declaration information. If goods only transit through Hong Kong, foreign exchange receipt and payment can be directly handled according to re-export trade, through CIPS RMB cross-border payment or SWIFT channel settlement is acceptable. A complete set of transit contracts, bills of lading, customs declarations must be retained to ensure the consistency of capital flow and goods flow, and comply with foreign exchange regulatory compliance requirements.
If a Hong Kong offshore account is used for foreign exchange receipt and payment of re-export trade funds, it is necessary to regularly report the corresponding income and expenditure information to the mainland foreign exchange administration to avoid problems such as pending accounts that cannot be settled. When declaring customs duties, it is necessary to ensure that the goods value is consistent with the price of foreign exchange receipt and payment, to avoid triggering compliance alerts due to amount deviation.
WilliamYears of service：10Customer Rating：5.0
International Logistics AdvisorStart a Chat
In Hong Kong re-export trade, the terms of transfer of title must be clearly marked in the trade contract, and the responsibility for corresponding customs duty declaration must also be divided clearly. If the buyer requires re-export container splitting, the responsible subject for customs duty declaration must be clearly defined in the contract to avoid disputes due to declaration problems later.
If letter of credit settlement is used, carefully check the terms of the letter of credit regarding country of origin and customs duty declaration for re-export trade to avoid soft clauses that cannot be negotiated. If there is a delay due to customs detention of goods during transit, the division of responsibility must be clearly defined in the force majeure clause in advance to avoid unnecessary breach of contract compensation risks.
JohnYears of service：6Customer Rating：5.0
Export Tax Rebate AdvisorStart a Chat
If goods transiting through Hong Kong re-export are arranged for inspection by customs, first check the authenticity of the seal to confirm that the seal has not been modified. If the goods are full-container transit with no need for unpacking, an application for non-intrusive inspection can be submitted to customs without unpacking, which can shorten the inspection time and reduce port congestion costs.
If container search is needed, prepare a complete set of transit contracts, certificates of origin, bills of lading and other documents in advance, cooperate with customs to check the name, quantity, country of origin information of goods to ensure consistency with declaration information. If customs require sampling for identification, provide the original factory MSDS or quality certificate in time to speed up the identification process and shorten the customs clearance time.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
If goods transiting through Hong Kong re-export need to be split and re-dispatched, the packaging must meet the compliance requirements of Hong Kong Customs. Dangerous goods transit must use dangerous goods packaging that meets UN standards, complete dangerous goods classification identification in advance, provide corresponding MSDS documents, mark correct dangerous goods labels to avoid detention due to non-compliant packaging.
If goods need to be stored and transited in Hong Kong for a long time, do a good job of moisture-proof and reinforcement treatment, select appropriate buffer packaging materials to avoid damage to goods during transit. At the same time, the shipping marks must clearly mark the transit attributes of goods and destination port information, to facilitate customs inspection and identification, and avoid declaration errors due to unclear shipping marks.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
For export tax rebate of Hong Kong re-export trade, it is necessary to ensure the alignment of four flows: goods flow, capital flow, invoice flow and contract flow, the goods value of corresponding customs duty declaration must be consistent with the goods value of export tax rebate declaration. If foreign exchange receipt for re-export trade, it is necessary to complete foreign exchange receipt verification within the specified time limit to normally handle export tax rebate.
If the tax bureau sends a letter for investigation, provide a complete set of re-export customs declarations, transit agreements, foreign exchange receipt vouchers, cooperate with the investigation, prepare document filing in advance, retain all documents for at least five years to avoid export tax rebate being rejected due to missing documents or even being identified as tax fraud risks.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
The customs duty cost of Hong Kong re-export trade can be reduced by optimizing the supply chain structure. If goods need to be resold multiple times, they can be stored in a bonded warehouse in Hong Kong in advance, and complete customs duty declaration when transfer of title occurs, which can defer tax payment time and optimize cash flow.
According to the tariff policies of different destination countries, select appropriate incoterms, adjust the location of transfer of title, reasonably reduce customs duty costs. For different categories of goods, corresponding re-export trade structures can be designed, distinguish between transit goods and resold goods, apply different customs duty declaration rules respectively, avoid unnecessary tax expenditure, at the same time optimize inventory linkage, reduce the transit time of goods in Hong Kong, and reduce port congestion costs and compliance risks.