Do import duties need to be paid for transit trade goods that only pass through the territory without entering the domestic consumption link
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I am engaged in cross-border transshipment of industrial consumables. Recently I have a batch of special machine tool parts shipped from Southeast Asia to Europe, which I plan to store temporarily in the Shanghai Yangshan Port Bonded Zone for two weeks before transshipping to the destination. I heard from peers that some people operating similar transit businesses were required by customs to pay more than 100,000 RMB in supplementary import duties.
I am very confused about the rules now, afraid of being fined for non-compliance due to undeclared items, or paying unnecessary taxes and fees for no reason. I want to confirm whether import duty is payable for this kind of normal transit trade, and what special operational details I need to pay attention to avoid pitfalls and unnecessary additional operating costs.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
Many people mistakenly believe that once goods enter a domestic port，they are considered as inbound goods that must pay import duty，which is the most common cognitive misunderstanding in the industry. If the documents are marked vaguely during inbound declaration and the transit attribute of the goods is not actively indicated，the subsequent customs system will judge the goods as general imported goods，resulting in delayed declaration fees or even direct cargo detention. The enterprise will also need to pay full customs duty plus import value-added tax retroactively，which will reduce the enterprise's customs credit rating for 3 consecutive months，and the subsequent customs inspection rate will directly increase to more than 30%.
To completely isolate such risks，you must select the regulatory attribute of "transit goods / transit trade" during inbound declaration，and attach complete purchase and sales contracts between two overseas parties and copies of full set of bills of lading，to ensure that the goods never leave the bonded supervision area and no cargo right is transferred to any domestic market entity.
Carry out closed-loop verification of transit business documents once every quarter，keep all cargo right transfer vouchers for 3 years for future reference. Transit trade that meets compliance requirements does not need to pay any import duty，and only a small amount of bonded zone storage and operation fees are required to be paid as required. If part of the transit goods are temporarily diverted to the domestic market for sale in the middle of the process，the general import declaration process must be followed separately to pay the corresponding taxes and fees，and they cannot be mixed into the transit batch for tax exemption treatment.
If you previously mistakenly declared it as general trade and want to modify the declaration，you shall submit the transit qualification certificate to go through the declaration deletion and re-submission process before the goods leave the supervision area，to avoid additional late payment fees afterwards.
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
The core judgment standard of customs for transit goods is that the final destination of the goods is not within the customs territory. The regulatory method column in the inbound declaration shall be filled with the corresponding transit trade code accurately, and the value difference between the two attached overseas trade contracts shall conform to the conventional range of the corresponding industry, without abnormal price difference that obviously deviates from the fair market price. The customs valuation link will directly verify the full-link vouchers of the goods flow.
If all documents can confirm that the goods will eventually leave the territory, the import duty collection instruction will not be triggered. If the regulatory method of general trade is incorrectly selected during declaration, the subsequent modification of documents requires going through the declaration deletion and re-submission process, which takes at least 7-10 working days to complete, and all costs incurred by the goods staying at the port during this period shall be borne by the declarer itself.
EmilyYears of service：3Customer Rating：5.0
Client Success AdvisorStart a Chat
The full set of transport bills of lading for transit trade goods shall be endorsed "to order", and no domestic consignee shall appear as the consignor on the bill of lading. When the goods call at the transit port, the direct transshipment mode shall be arranged directly, and the goods pickup procedures shall not be handled in advance. Apply to the shipping company for a 14-day free storage period at the transit port in advance, to avoid high container demurrage caused by over-staying of goods in the port area.
The booking information for transshipment vessel shall be synchronized to the port customs in advance for pre-matching, to avoid temporary voyage changes leading to goods detention in the port area which are mistakenly judged as import goods pending clearance. All manifest information related to transshipment must be completely consistent with the transit attribute declared at inbound, and no field shall be incorrectly filled or omitted.
SophiaYears of service：7Customer Rating：5.0
Senior Customs AdvisorStart a Chat
If the goods of transit trade do not enter the domestic consumption link throughout the whole process, they do not fall within the scope of levy of import value-added tax and customs duty. The corresponding price difference between overseas purchase and sales only needs to be declared as overseas non-trade income for tax purpose, and no taxes and fees at the import link shall be paid.
Attention shall be paid not to mix the goods flow of transit trade and the goods flow of domestic general trade in accounting, to avoid abnormal early warning of illegal deduction of domestic input tax. If part of the goods are temporarily diverted from the transit batch to the domestic market for sale, the general import declaration process must be followed separately to pay corresponding taxes and fees, and they cannot be directly mixed into the transit batch for tax exemption treatment, otherwise large tax fines will be triggered.
CharlotteYears of service：4Customer Rating：5.0
Currency Exchange AdvisorStart a Chat
The receipt and payment of foreign exchange for transit trade shall be collected separately through an offshore account or a verification-to-be-verified account under the current account. The transaction remarks for all receipts and payments must be marked as "transit trade payment", and shall not be mixed with the receipt and payment path of domestic general trade.
The CIPS cross-border payment message shall clearly indicate the names of overseas payers and payees at both ends, to avoid abnormal transaction background judged by SWIFT verification leading to suspended foreign exchange receipt or payment. The full set of transit trade documents shall be submitted to the bank for verification later to release the funds. When settling the accounts, the goods flow, capital flow and document flow must be completely matched, and the amount deviation shall not exceed 5%.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
The two purchase and sales contracts for transit trade shall clearly indicate that the goods delivery location is the yard in the transit port bonded zone, and the cargo right transfer node is set to be after the goods enter the transit port supervision area, and the second cargo right transfer shall be completed before the goods leave the territory.
Special clauses shall be added to the contract to stipulate that if the goods are detained due to declaration issues with the transit port customs, all related disposal costs shall be borne by the responsible party. The non-original bill of lading delivery guarantee letter obtained from the shipping company shall clearly cover the transit port area, to avoid loss of cargo right caused by delivery of goods without bill of lading in the transit link, and unnecessary tax and fee losses afterwards.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
If the transit goods are selected for manual inspection after X-ray scan, prepare the full set of two overseas trade contracts, full set of bills of lading, and transshipment booking confirmation in advance for the on-site customs officer to verify. Cooperate with the customs officer to confirm that the seal number is completely consistent with the number declared at inbound.
Do not apply to move the goods outside the supervision area for inspection, all inspection operations shall be completed within the supervised yard of the port area. Do not unpack or move the goods without permission. As long as it can be confirmed that the goods will not flow into the domestic market, the inspection process can be completed on the same day, no additional disposal costs will be incurred, and no subsequent taxation process will be triggered.
OliviaYears of service：5Customer Rating：5.0
Senior Customs AdvisorStart a Chat
All documents of transit trade shall be archived separately and shall not be mixed with the tax refund documents of general export trade. Transit trade is not covered by export tax refund, and the corresponding input invoices of transit goods shall not be illegally used to declare for export tax refund, to avoid triggering the verification process of the tax authority.
Once the verification result is judged as abnormal, the enterprise's export tax refund qualification will be suspended for at least 6 months, and all subsequent existing tax refund declarations need to be verified one by one. The additional compliance cost incurred is far higher than the tax that may be saved originally, which will directly affect the enterprise's capital turnover efficiency for the whole year.