Significant Cases in Customs Inspection! Pay Attention!

These significant cases in the process of customs inspection. Do you get it?

A company in Guangzhou purchase concentrated solution that contains the patent right from a foreign producer, who is the possessor of the patent right at the same time. After import, it is needed to be diluted with water before selling and then sell after packaging.

As one of the conditions in the sales process, this company needs to pay the disclosure fee to the producer, for obtaining the right of mixing and using this concentrated solution in the process of resale.

The figure of disclosure fee is calculated on the basis of the final sales price of the product.

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Since the company has to pay disclosure fee in order to obtain the concentrated solution, the disclosure fee is a condition of sales. 

Simultaneously, after the concentrated solution is imported, it is directly sold through simple processing, which already contains the patent right.

So, this disclosure fee should be included in the actually paid or payable price of imported goods.

The alteration between domestic and foreign investment, influencing tax reductions or exemptions policy. 

A company in Guangzhou formerly is a wholly foreign-owned company, imported a batch of equipment in the form of tax reduction or exemption in 2017, because it met the requirements of encouraged projects, in the catalog of Directory of Industrial Guidance for Foreign Investment.

When the customs inspected the company, it is founded that this company has changed it’s nature of enterprise on Mar 3, 2018, from a foreign-owned company to a joint-stock company, and foreign investment is less than 25%.

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According to the announcement regulation of no. 35 of the general administration of customs in 2007, some of the company’s equipment has not met the qualification for tax reduction and exemption. 

And this company didn’t handle procedures for subject change in customs with 30 days after issuance of a business license. The company’s above-mentioned behavior violates relevant regulations, and cause lower tax or tax leakage.

The company involved in tax reduction and exemption of importing goods may refer to two documents, “Announcement of the General Administration of Customs, No. 35 of 2007” and “Administrative Measures on Tax Reduction and Exemption of Customs Import and Export Goods of the People’s Republic of China“.

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• In the process of clearing custom, if there are any special relationships between seller and buyer, you should check special relationships items on the customs declaration form.

• Regardless of whether there is a situation in which the transaction price is affected by a special relationship.

• It is necessary to retain relevant information to support the relevant judgment, but it is not mandatory to submit relevant information to the customs at the reporting stage; if it is a maritime surcharge, it is declared in the import.

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• At the time, the shipping list provided by the shipping company was not obtained, and the declaration can be added to the customs after the amount is clear.