How to Divide Responsible Parties for Various Expenses of Proxy Imported Vehicles?
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I am the head of a trading company that has just entered the imported vehicle business. Recently, we entrusted an agency company to import a batch of luxury sedans, but the contract did not specify the responsible party for each expense.
The agency side states that our company shall cover the customs declaration fee and port detention fee, and they will advance the tariff and VAT for subsequent reimbursement. I am worried that there will be hidden costs such as inspection fees and storage fees later, and I do not know who shall bear these expenses.
If the port detention fee is caused by the agency's operational delay, is it also supposed to be borne by our company? I hope to clarify the responsible party of each expense to avoid disputes.
SophiaYears of service：7Customer Rating：5.0
Senior Customs AdvisorStart a Chat
The expense bearing of proxy imported vehicles shall be defined from two dimensions: contract clauses and actual operation scenarios. First，the fixed agency fee，which is the basic charge for agency services，is usually borne by the entrusting party. Second，most reimbursable expenses (such as tariffs，VAT，customs declaration fees) are borne by the entrusting party in most cases，since the entrusting party is the ultimate owner of the goods and shall pay for all statutory taxes and fees as well as direct operational costs.
However，it shall be noted that extra expenses caused by the agency's operational errors (such as port detention fees due to delayed customs declaration，declaration cancellation fees for repeated submission) shall be borne by the agency side. It is recommended to add the Fault Liability Division Clause in the contract to clarify the compensation scope for operational errors.
In terms of cost optimization paths，enterprises can apply for VAT Deferral (such as the deferred VAT payment policy implemented at Shanghai Port)，to defer VAT payment to the sales stage and ease capital pressure. When choosing the CIF trade term，it is required to confirm whether logistics fees are included in the agency quotation to avoid duplicate payment.
Finally，when dynamically calculating the revenue ratio，hidden costs (such as storage fees) shall be included in the total cost，and compared with expected profit to ensure the business feasibility.
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
From the perspective of customs valuation, the responsible party for tariffs and VAT of proxy imported vehicles is determined by the price terms specified in the trade contract. Under FOB term, the entrusting party bears the freight, insurance premium and import taxes and fees; under CIF term, logistics fees are already included in the goods value, but import taxes and fees are still borne by the entrusting party.
The customs will verify expense payment vouchers during valuation, so the agency that advances taxes shall provide the entrusting party's authorization letter and transfer records to avoid valuation disputes.
JohnYears of service：6Customer Rating：5.0
Export Tax Rebate AdvisorStart a Chat
In the logistics link, the responsibility for container detention fees and free storage period fees is determined by liability attribution. If port detention is caused by the entrusting party's failure to provide customs declaration documents in a timely manner, the container detention fee shall be borne by the entrusting party; if the agency fails to arrange container pick-up in time, the agency shall be responsible for such fees.
It is recommended to specify the duration of free storage period (7-14 days) and the expense division standard for the period exceeding the limit in the logistics agreement, and choose direct shipping solutions to reduce potential extra expenses caused by transit.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
The VAT deferral policy applies to proxy imported vehicle business. When the entrusting party is a general taxpayer and the goods are used for resale, it can apply to defer VAT payment to after sales, so as to reduce capital occupation cost.
In cross-border related transactions, the pricing of agency fees shall comply with the arm's length principle to avoid transfer pricing investigations by tax authorities.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
For cross-border receipt and payment of foreign exchange, when the entrusting party pays agency fees and advanced taxes to the agency, it shall clearly mark the purpose as "proxy import expenses" in the foreign exchange declaration, and provide relevant vouchers such as contracts and invoices. When using CIPS RMB cross-border payment, ensure that the counterparty information is true and accurate to avoid fund freezing caused by foreign exchange compliance risks.
OliviaYears of service：5Customer Rating：5.0
Senior Customs AdvisorStart a Chat
The contract shall specify detailed clauses on expense bearing to avoid vague expressions. For example, the vague wording "all expenses related to import shall be borne by the entrusting party" may easily include various hidden costs.
It is recommended to list specific expense items (tariff, customs declaration fee, logistics fee) and their corresponding responsible parties. A force majeure clause shall be added to agree on the apportionment method of extra expenses caused by force majeure factors such as port strikes and policy adjustments.
DavidYears of service：3Customer Rating：5.0
Business Development AdvisorStart a Chat
The devanning fee and inspection submission fee generated during customs inspection are usually borne by the entrusting party. However, if the inspection is triggered by the agency's incorrect documents (such as wrong HS code), the inspection fees shall be borne by the agency side.
It is recommended to stipulate in the agency agreement that the agency shall bear all inspection fees and resulting port detention fees caused by document errors on the agency's part.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
From the perspective of supply chain cost optimization, select appropriate trade terms to reduce risks. Under EXW term, the entrusting party bears all expenses but has high control over the goods; under DDP term, the agency bears all expenses but the entrusting party needs to pay higher agency fees.
Select appropriate terms according to the enterprise's capital status and risk tolerance, and establish an expense monitoring mechanism to track expenditures in real time.