The state has implemented a series of tax rebate policies for foreign trade export enterprises in order to encourage foreign trade exports and promote economic development. Among them, EXW Export Rebates is a kind of tax rebate that foreign trade enterprises can enjoy.
EXW Incoterms related post
EXW Export Rebates
Conditions for EXW Export Rebates
According to the definition and characteristics of trade terms of EXW, the author judges whether tax rebate can be carried out from four perspectives: eligibility conditions, information flow, logistics and capital flow.
Eligibility conditions
Goods with tax rebate rate: first of all, the exported goods are goods with tax rebate rate; enterprises with tax rebate qualification: enterprises declaring tax rebate should have the qualification of tax rebate.
Information flow
Customs declaration information flow: the transaction mode of customs declaration is EXW, and the consignor is an export tax rebate enterprise; filing documents flow: prepare the relevant filing documents, for example, transport documents, it is best to provide photocopies of the original bill of lading, in order to facilitate the examination and approval of export tax rebate management authorities.
Logistics
The actual departure of goods (with transport documents): the goods have actually left the customs territory, which can be supported by the transport documents mentioned in the customs declaration and filing documents; entering the special area (without transport documents, reflected through the customs declaration): the goods enter the special supervisory area or special supervisory place capable of refunding the tax through the customs declaration, filing list and other declarations. Customs declaration, filing list and other declaration documents to support.
EXW Export Rebates
Financial flow
Collection of foreign exchange: the enterprise for export tax rebate declares and collects foreign exchange; confirmation of sales: the goods for export tax rebate are confirmed to be sold.
If you don’t want to just read these text interpretations, you can click on the video below to help you understand more quickly about EXW Export Rebates：
Notes for EXW Export Rebates
The above content may seem easy, but in practice, the calculation of export tax rebate amount and the filing documents in the export tax rebate procedures are matters to which enterprises and export tax rebate management authorities need to pay great attention.
- When the seller wants to declare customs, the seller should apply for customs declaration in the name of the consignor. If the customs declaration is made in the name of another person, it will cause a lot of unnecessary trouble, such as the procedure will be more complicated, or the consignor needs to go to the customs repeatedly to apply for the relevant materials, which will also make the consignor waste time and energy.
- If the foreign trade consignor chooses to declare customs, he must ask the other customer to provide the seller with copies of the relevant bills of lading. With these copies, it proves that the consignor provides to the relevant departments at the time of customs declaration. If the customer cannot provide the corresponding copies, the consignor can only provide letters or instructions to the competent state tax in advance.
Calculation of EXW Export Rebates Amount
Calculation Method and Conversion of EXW and FOB
According to the regulations on the calculation of export tax refund, the tax refundable amount is calculated by multiplying the FOB of the exported goods in the current period by the foreign exchange rate in RMB.
The conversion formula of FOB and EXW Export Rebates is: FOB = EXW + freight cost of domestic section + premium of domestic section (if necessary) + customs clearance cost.
According to the definition of trade terms, the difference between EXW and FOB is mainly in the domestic section of the transportation and insurance premiums and export clearance procedures – FOB seller to the goods in the designated location (loaded on board the ship) to the buyer’s designated carrier, and export clearance procedures, that is, the completion of delivery.
Therefore, if the transaction mode of the customs declaration is EXW, the calculation of the FOB-based export tax rebate amount should take into account the freight, premium and export customs clearance costs of the domestic segment, even though these costs are not borne by the seller.
EXW Export Rebates
EXW Export Rebates Application Process
- Application for EXW export tax rebate needs to follow a certain process, the following is the general application process:
- Prepare relevant documents: including export contract, invoice, packing list, customs declaration and so on.
- Fill in the application form: Fill in the application form for tax rebate according to the relevant regulations, and prepare other necessary attachments.
- Submission of application materials: submit the completed application form and related materials to the relevant state departments, such as Customs or the Tax Refund Bureau.
- Review and Approval: The relevant state authorities will review and approve the application materials to verify the amount of EXW Export Rebates and compliance with the conditions.
- Tax Refund Payment: Pay the tax refund to the applicant through bank or other means.
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