Does transit trade need to pay import duties and other related taxes and fees to the destination country?
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I am a salesperson at a foreign trade company. I just received a transit trade order recently. The goods are shipped from Malaysia to Germany without passing through Chinese territory at all. When doing ordinary exports before, I always completed customs declaration and tax refund normally, but this time the goods are directly shipped from a third country to the destination country, and I have no idea whether transit trade needs to pay tariffs. I am both worried that German customs will levy import tariffs according to local tax rates, and that the country where the transit port is located, such as the Netherlands, will impose transit taxes.
If additional tariff costs are incurred, this order will have no profit at all. Moreover, I still don't know how to judge which situations require paying taxes. Can you help me sort out the specific rules for tariff payment in transit trade?
SophiaYears of service：7Customer Rating：5.0
Senior Customs AdvisorStart a Chat
Tariff payment for transit trade must be judged by scenarios，focusing on two key points: substantial processing judgment and application of origin country tax rate. First，pre-document review: it is necessary to confirm in advance whether the goods in the transit country are only undergoing non-substantial processing such as simple loading and unloading，labeling，etc. If they are only in transit，most countries will exempt transit tariffs，if they involve substantial processing such as assembly，transformation，etc。the transit country will levy tariffs as if it were local production.
In terms of core node connection，the tariff of the destination country is levied according to the origin country tax rate of the goods，which has nothing to do with the transit country. For example，the origin country of the goods in this order is Malaysia，and German customs will calculate import tariffs based on the tax rate under the Malaysia-EU Free Trade Agreement，not the tax rate of the transit country Netherlands. It should be noted that the EU CBAM Carbon Border Adjustment Mechanism has been fully implemented in 2026. If the goods do not meet the carbon footprint requirements，additional carbon tariffs will also be paid.
In terms of contingency plans，if the transit country's customs suspects that the goods have processing activities，it is necessary to immediately provide documents such as the original country's certificate of origin，the manufacturer's proof of non-processing，the full set of bills of lading，etc. to prove oneself. If the goods stay in the transit port beyond the free storage period，it is necessary to coordinate with the freight forwarder to apply for an extension in time to avoid demurrage fees.
The final compliance implementation needs to ensure the completeness of transit document filing: submit the transit goods customs declaration form，property rights certificate，and transportation route documents to the transit country's customs. At the same time，confirm the tariff bearer with the destination country's consignee，and clarify the rights and obligations in the contract in advance to avoid subsequent disputes.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
When transit goods pass through the transit country, they must be declared in accordance with the local transit goods supervision requirements. Most countries such as the Netherlands and Singapore exempt transit tariffs for goods that are only loaded, unloaded, and stored, but it is necessary to submit the transit customs declaration form and the full set of transportation documents in advance.
If the goods stay in the transit port beyond the 14-day free storage period, an extension must be applied to the customs; otherwise, demurrage fees will be incurred. If the customs finds that the goods packaging does not match the declaration during inspection, it is necessary to immediately provide supporting documents such as original production labels, certificates of origin, etc., to avoid being identified as substantial processing.
In 2026, the General Administration of Customs updated the transit trade pricing rules, focusing on verifying the transfer of property rights and capital flow in transit trade.
If the time difference between foreign exchange receipt and payment exceeds 90 days, a reasonable explanation must be submitted; otherwise, it may be identified as an abnormal pricing. For transit goods at Shanghai ports, they can quickly declare transit through the National Integrated Customs Clearance System without submitting paper documents at the port site.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
The choice of logistics path in transit trade directly affects tariff costs. It is preferred to choose transit ports with transit free storage policies. For example, the Port of Rotterdam provides a 14-day free storage period, and the Port of Hamburg can extend it to 21 days, which can effectively reduce container detention fees.
There are points to note for bill of lading endorsement: it should be endorsed directly to the destination country's consignee instead of the transit country's freight forwarder to avoid property rights being controlled by third parties.
If the goods need to be simply labeled in the transit country, it is necessary to confirm in advance whether the local customs regards labeling as substantial processing. For example, EU customs regards only replacing packaging labels as non-substantial processing, but adding product description labels may be regarded as processing.
At the same time, it is necessary to coordinate with the freight forwarder to ensure that the goods use container seals throughout the whole process, and the seal number must be consistent with the declaration documents to avoid abnormalities during inspection.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
Tax planning for transit trade needs to focus on two core points: first, the compliance of foreign exchange settlement; second, the tax exemption policies of the transit country. In 2026, the CIPS Cross-border Interbank Payment System has covered more than 90% of trading countries worldwide.
Transit trade can receive and pay foreign exchange through CIPS to avoid exchange rate fluctuation risks. At the same time, it is necessary to ensure that the foreign exchange receipt amount is consistent with the contract and bill of lading amount to avoid inspection by the State Administration of Foreign Exchange.
If the transit country and the destination country have signed a free trade agreement, they can apply for the applicable agreement tax rate, but need to provide a compliant certificate of origin.
For EU transit trade, if the goods do not enter the EU territory, EU VAT does not need to be paid, but transit tax filing is required in the transit country. If related transactions are involved, pricing documents must be prepared in advance to avoid investigations by the BEPS mechanism.
EmilyYears of service：3Customer Rating：5.0
Client Success AdvisorStart a Chat
The compliance of foreign exchange receipt and payment in transit trade must strictly follow the principle of "four streams consistency", that is, the contract flow, goods flow, capital flow, and document flow must be unified.
The foreign exchange receipt must be paid directly to the domestic company account by the destination country's consignee, and cannot be transferred through a third party; otherwise, it will be identified as a violation. If the transit trade involves multiple transit ports, each segment's sea waybills and packing lists must be retained to ensure traceability of the goods flow.
In 2026, the State Administration of Foreign Exchange updated the transit trade verification rules, focusing on verifying the authenticity of transit trade. If complete trade documents cannot be provided, it will be included in the key foreign exchange supervision list.
For transit trade with a single amount exceeding 5 million US dollars, prior filing with the local foreign exchange bureau is required to avoid abnormal foreign exchange receipt and payment.
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
The transit trade contract must clarify the tariff bearer. If the contract does not stipulate, according to the Incoterms 2020, under the FOB term, the buyer bears the destination country's tariffs; under the CIF term, the seller bears freight and insurance, but the tariffs are still borne by the buyer.
A tariff dispute clause must be added to the contract. If tariffs increase due to changes in customs policies, both parties can negotiate to adjust the contract price.
If the transit country's customs detains the goods, it is necessary to contact a local lawyer immediately for assistance, and at the same time provide a full set of trade documents to prove the transit nature of the goods.
It should be noted that in 2026 some countries have introduced new inspection regulations for transit goods, increasing the inspection proportion for goods from high-risk countries. It is necessary to prepare a response plan in advance, such as purchasing customs inspection insurance, to reduce loss risks.
WilliamYears of service：10Customer Rating：5.0
International Logistics AdvisorStart a Chat
When transit goods are inspected at the transit port, a dedicated person must be arranged to accompany on site, confirm the identity of the customs inspectors, and verify that the seal number is consistent with the declaration. If the customs requires container unpacking inspection, full supervision is required to avoid the goods being swapped or damaged.
If it is found that the goods do not match the declaration, it is necessary to immediately explain the situation to the customs and provide original production certificates, such as the manufacturer's ex-factory certificate, photos during transportation, etc.
In 2026, some transit ports launched AI inspection systems, which can quickly identify the country of origin and goods information by scanning the goods labels. If the labels are blurred or inconsistent with the declaration, an inspection will be triggered directly.
Therefore, it is necessary to ensure that the goods labels are clear and accurate, consistent with the certificate of origin and packing list. If there is an objection to the inspection result, a re-inspection can be applied for, and the re-inspection application must be submitted within 7 working days.