Domestic sales and prices are important elements of compliance management for processing trade enterprises, and relate to such important matters as the elimination of surcharges and privacy controls within processing trade. In this paper, for example, the main problems, causes and resolution strategies in processing trade-related domestic prices are analysed in terms of the identification of marginal and bonded items, differences in declared prices and customs valuations, differences in internal sales prices and prices of imported materials, and whether internally sold materials enjoy preferential origin, with a view to providing good learning and inspiration to enterprises。
I. Typical profiles
The following more typical problems have been encountered by a three-firm enterprise established in an export processing zone in guangdong, which is mainly involved in processing trades, where imports of materials or the internal marketing of their finished products often occur。
First, the marginal to the processing of a batch of raw material is subject to a pre-registration internal tax write-off procedure, which is the normal process loss resulting from the production of finished products exported from the processing trade contract, and a mixture of various import insurance items whose value is much lower than that of the original import premium. Does the marginal material be valued by the actual reporting status of the marginal material, or is there a supplemental tax declaration based on the corresponding consumption import insurance
Second, the actual sales price of steel scrap, which is the edge of the steel plate produced during the processing process by imported steel plates, which are sold within a trade-off enterprise, differs somewhat from the customs excise price, i. E., the customs excise price is higher than the firm's actual sales price, resulting in an increase in corporate taxes。
Thirdly, the processing trading enterprise's tariff-exempting rate of part of the imported material was higher than the declared price of the original import, resulting in an increased tax burden on the processing enterprise。
Fourthly, the processing trading enterprise, which receives a portion of its imports from asean countries and enjoys preferential rates under bilateral agreements, does not grant preferential rates for bilateral trade, although it submits the certificate of origin of the china-asean free trade agreement (forme) at the time of its domestic sale, which is contested by the processing trading enterprise。
Analysis of typical cases
1. Question of the determination of edges
Article ii of the customs measures of the people's republic of china for the processing of trade margins, residual substances, residual goods, by-products and dangerous premise goods (hereinafter referred to as " the management scheme " ) provides that borderlines are those in which processing trading enterprises engage in processing and re-export operations, and in quantities of scrap, shredding and sub-feed that are reasonable in the amount of manufactured goods that cannot be re-used for processing under the contract, in units approved by the customs authority; and that, in the case of marginal substances, “the taxable rates applicable after the processing trading enterprises apply to customs for the export of marginal materials and the interest on the certified edge price may be waived” (article iv, paragraph 1, of the scheme); and that article vi of the customs procedure of the people's republic of china for the elimination of tax fees on precise goods within customs (hereinafter referred to as " the method of adjudicative prices " further provides that “the margin or by-products generated in processing enterprises may be reviewed for tax price determination on the basis of their internal sales”。
However, if the internally sold material is ultimately determined to be a residual product (including unfinished goods) or a residual material, or a residual material, produced in the course of production, the internal selling price shall be declared according to its corresponding import material value; since the material in question in this case is a material processed material, the tax price shall be reviewed on the basis of the traded price of imports of the same or similar insured goods imported at the same time or approximately at the same time as the contents (article 5 of the pet)。
In the present case, according to the description of the processing enterprise, the internally sold material was a mixture of various import insurance items processed and could no longer be used for the processing of manufactured goods for export, and its value was significantly lower than the value of the original import insurance items. In the absence of exceptional circumstances, it should be marginal, but ultimately subject to validation by the competent customs authorities。
In addition, given the similar appearance of edges and defectives, but in a different way of management, enterprises should be conscious of internal controls to distinguish between management of edges and defectives in order to facilitate customs enforcement and reduce disputes and risks。
2. The price of tax elimination within the marginal is higher than the actual selling price of the enterprise
Although article 6 of the aat makes it clear that “the marginal or by-products generated during the processing process within the processing enterprise are subject to a review of their internal sales prices to determine the price of the tax; in view of the fact that the marginal often has no internal sales price or its authenticity, accuracy and otherwise difficult to review, customs may also periodically publish reference prices for the internal sales of the marginal and by-products based on market conditions. A processing trade enterprise may choose to declare it to customs at either the internal sales price or the tax reference price, or, if a processing trade enterprise chooses to declare it at the tax reference price, the customs shall fix the tax price at the tax reference price or, if an enterprise chooses to declare it to customs at the domestic sales price, after verification by the customs price review, at the internal sales price determined by the customs review。
In the present case, the difference between the tax price of the margin of sale within the enterprise and the actual sales price of the enterprise may be due to the incorrect tax number declared by the enterprise. It has been found that the scraps involved could be attributed to two different hs codes - “unlisted steel scrap” (hs:72044990) and “mechanical scrap” (hs:72044100). According to the reference price table for processing trade marginals, published by the competent customs authorities, the difference between the two prices was almost $200-500/ton between 2010 and february 2014. Depending on the processing process and the type of product involved, the iron edges actually produced and sold are the lower-priced “mechanical scrap” (720441000) (which is essentially the equivalent of the firm's actual sales price), but the firm actually declares it to be the higher-priced “unlisted scrap” (720449090), resulting in a certain deviation between the actual sales price and the customs tax price。
Therefore, first, in making a marginal internal sales declaration, processing trading enterprises need to pay attention to the relevant administrative regulations, such as the reference prices table for the disbursement of taxes in the processing trade borders issued by the competent customs authorities, in addition to regulations such as the arbitration scheme and the regulation scheme, and to strengthen communication and coordination with the competent customs authorities in order to establish or change tax numbers based on the actual classification of goods in order to effectively increase the accuracy of tax prices for internal sales。
Second, given that “when borderlines, by-products and goods subject to hazard insurance, which are required to be taxed on residual value, are allowed to be sold in the auction by the customs, the customs shall review their auction prices to determine the tax price” (article vi of the aat scheme), the enterprise shall actively participate in the customs online auction pilot to resolve the problem of marginal domestic prices by means of online auctions and to achieve a win-win between customs and enterprises。
Third, in the process trade, where processing processes are complex and diverse, marginal materials tend to arise from different processes in process production, in different forms and with different recoverability and value. Customs should therefore gradually explore the management model for marginal classification in order to improve the accuracy of the margin sale prices。
3. Excise tax on imported materials at higher than original import prices
In addition to the method of validation of taxed prices in imported material for processing, as specified in article v, article iv also makes it clear that when imported material is processed or sold (including defective items), customs determines the taxed price on the basis of a trade-off price for the original import of the material; if the goods are imported in instalments where the internal sale is not possible to determine a corresponding batch of imports, customs may, in accordance with the principle of the same number, the same name and the equivalent number, review the weighted average price obtained from the transactional price of the imported material during the validity period of its contract or the electronic book write-off cycle; and if the average value of the transactional price added to the imported material is difficult to calculate or determine during the validity period of the contract or the electronic account write-off cycle, customs may review the tax price determined on the basis of the objectively quantifiable average price added to the value of the current import. Thus, the internal excise tax price of the imported material, whether in the form of material processing or in the form of material processing, is determined on the basis of an import sale price。
The reasons for the higher than the original import price of imported materials may be the following: (i) failure to declare specifications, models at the time of filing, import (e. G. Plastic parts, vague declaration of hardware components) or failure to declare specific names (e. G. Machinery, electronic parts, etc.) by combining the items together, which results in the filing of contracts, the non-attendance of import prices, differences in prices at the time of internal sales, particularly when internal sales are made; and (ii) the emphasis placed in article iv of the pet scheme on the “basis” rather than “standards” at the price of the original imports of the materials, as a result of the long lead-time period of processing trade regulation, the length of time when the materials are sold within the processing trade, the length of months, months and months, the length of the year, and the numerous price fluctuations of uncertainty in the domestic and foreign commodity markets over the period, as well as the many price factors requiring price reductions or reductions, such as the special relationship that may exist between domestic processing firms and outsiders. In this case, customs may accept a review of the price of imports of the same or similar goods that are imported at or around the same time as the internal sales declaration to determine the full tax price; (3) the amount of data involved in the examination (in particular the determination of the same or similar insured goods required for the internal sales price in the processing process, the calculation of the weighted average price in the processing of the imported goods, etc.) is based on the examination of the transaction price of the same or similar goods imported at or around the same time; and, in practice, there are also instances where some customs agents are simple, mechanically processed prices, which result in the part of the customs validation where the tax is higher than the original import transaction price。
Therefore, in order to improve the accuracy of the prices considered for imported materials, on the one hand, enterprises should focus, when filing and importing, on the normative aspects of commodity declarations, such as the specification, model or specific name of imported material, or when consolidated, thereby providing the basis for the accuracy of internal sales classed prices; on the other hand, customs should optimize the process and procedures for processing prices, strictly following the principle of reviewing the prices of finished taxes for imported raw materials (for the processing of raw materials) and the import of the same or similar imported bonded goods (for the processing of raw materials); in cases where the enterprise is unable to provide original import invoices, determine the full tax prices on the basis of sales contracts and invoices provided by the enterprise; and, in cases where the price of imported materials cannot be determined, customs may determine the full tax prices of the internally sold, including through price consultation procedures or through price verification。
4. Non-receipt of special preferential rates of origin for internal sales of imported materials
It is lawful, reasonable and reasonable for customs to deny special preferential rates of origin to the processing trading enterprises involved in the sale of imported materials, for three main reasons:
First, article 14 of the customs administration of the people's republic of china on the regulation of taxes on imports and exports of goods of the people's republic of china stipulates that: if a tax is payable on goods that have been declared and released as insured, tax-exempted, leased or temporarily imported and exported, the customs duty-bearer shall again declare the tax rate in effect on the date of the tax and related formalities: (1) the insured goods have been approved for non-repatriation; (2) the insured warehouse goods have been transferred to the domestic market for sale; (3) the tax-exempt goods have been authorized for transfer or transfer for other purposes; (4) the temporary imported goods that are not subject to tax payment may be temporarily removed from the country and may not be returned or entered; (5) the imported goods have been leased and the tax paid in instalments. In this case, the situation in paragraph (2) was applied, at which point the tax would have to be applied at the rate at the time of the re-declaration, and at the time of the re-declaration, when the ctis were no longer able to provide the corresponding certificate of origin or certificate of movement, the special preferential rate of origin would no longer apply。
Second, the decision of the general customs administration on the amendment of partial regulations (decree no. 198) modified article ii of the regulations of the customs of the people's republic of china on the implementation of the rules of origin of the china-asean free trade area under the framework agreement on comprehensive economic cooperation between the people's republic of china and the association of southeast asian nations (decree no. 108) “this provision shall apply to goods imported from asean countries (the list of products is detailed in the import and export tax code of the people's republic of china) except for goods imported by way of processed trade” to read “the provisions of the agreement applicable to imports from asean countries (the list of products is detailed in the export and import tax code of the people's republic of china)” and to read “the provisions of the agreement on free trade zone rates of preference for goods imported by way of processing trade are not compatible with those listed in the certificate of origin or movement certificates of the people's republic of china and the agreement on comprehensive economic cooperation of the association of southeast asian nations (decree no. 199) to provide for the exclusion of seven imported goods from china-asean free trade area tax rates”. Since the certificate of origin or the certificate of movement is the status of the import at the time of the import in the form of a bonded material, the status of the material at the time of internal distribution, particularly the quantity, has changed, i. E. The actual status of the goods at the time of internal distribution is significantly different from that listed in the certificate of origin or the certificate of movement, the china-asean fta rate cannot be applied。
Third, in the practice of processing trading enterprises, the material of the same specification and model may come from several countries or regions (which may not be part of the preferential area of the same tax rate), and unless processing trading enterprises are able to fine-tune their management, it is difficult for customs to determine the actual origin of the domestically sold material when selling the prices, while enterprises may also be exposed to false ethical risks, and the review of origin may increase customs clearance times and costs and increase the burden on enterprises. In addition, processing trade regulations are long-term, short-term, short-term, long-term, long-term, long-term, and when imported material is sold, the certificate of origin may have expired and result in the exclusion of bilateral trade preferential rates。
Iii. Recommendations for enhancing domestic sales in processing trade
The internal sales audit of the processing trade is a highly technical exercise in which enterprises should strictly regulate the filing, import, storage, processing, export, internal sales chain in order to provide a solid basis for the processing of customs prices and, throughout the process, actively communicate and consult with the customs authorities in order to reduce the risk of processing them; in the event of any objection to the tax clearance price determined by customs, they should pay their taxes in accordance with the relevant administrative decision taken by customs and then apply for review at a higher level of customs in accordance with the law; in the event of a decision to reconsider, administrative proceedings may also be brought before a people's court in accordance with the law
