Differential duties refer to the situation where the same imported goods are levied different tax rates according to the actual situation or the exporting country.

In international trade, the customs declaration form and the transaction method are undoubtedly two core points. For beginners, the transaction method of the customs declaration form and the way to issue an export invoice are often confusing. So, how are the transaction methods of the customs declaration form regulated? And how should the export invoice be issued? Dont worry. Lets sort it out together.

The transaction methods of the customs declaration form mainly include three types: FOB, C&F, and CIF. According to a common “consensus” in the industry, the FOB price seems to have become an unwritten standard for issuing export invoices. But you may search through the documents and not find relevant regulations. So, which document stipulates this exactly?

(1) For customs declaration forms with transaction methods of C&F and CIF, the industry generally recommends converting them into FOB prices to issue export invoices. This recommendation is not groundless but is based on practical operation experience and the consideration of reducing tax risks.

(2) Regarding the issue of export invoices for non - FOB transaction methods, the tax administration has not issued relevant documents. However, tax authorities in some regions (such as Qingdao) have issued clear announcements or notices. Except for these specific regions, there are no rigid regulations in other places.

(3) In practice, the vast majority of finance and tax authorities staff tend to issue export invoices according to the FOB price. There are two reasons for this: First, the system requires the filling of the free - on - board price in US dollars (i.e., the FOB price), and doing so helps to check with the tax system data and avoid unnecessary troubles. Second, after the export goods are loaded on the ship, the risk of the goods is transferred to the buyer. Therefore, the freight and insurance premiums should be regarded as collection and payment on behalf of others. Therefore, it seems more appropriate to issue export invoices according to FOB (although this is not entirely correct).Export DrawbackAlthough issuing export invoices according to the FOB price is a common practice in the industry, if an enterprise must issue export invoices according to C&F or CIF due to specific reasons (for example, for the convenience of internal management), there is a small suggestion: indicate the FOB price in the remarks column. This can help the enterprise avoid unnecessary tax risks.Maritime TransportationIn international trade, correctly understanding and operating the customs declaration form and the transaction method is the basic skill of every export enterprise. When you face terms like FOB, C&F, and CIF, on this path, perhaps some regulations are not clear, but as long as we can understand the logic behind them, we can comply with the rules while also being flexible.

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Must export invoices be issued according to the FOB price?_Shanghai Zhongshen International Trade Import and Export Agency Service