Invoicing Chinese customer

Question posted by Renata Zawila, on behalf of Digital TV Labs in Bs1 3ag

Hi,
I work for a company which is a media and device testing specialist, operating globally.
We have received a request from our new, Chinese customer to incorporate on the invoice the local taxes (if we want to get a full amount). None of the other Chinese customers had asked about something like that before. I am not sure if it is something we can do for them.
Please advice

Thanks,

Renata

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Renata Zawila, on behalf of Digital TV Labs in Bs1 3ag.

PS the list of the items they want us to include on the invoice is as follow:
For the Chinese duty,the price list is:

(For USD6904.04)

value added tax 6% 464.29

urban maintenance and construction tax 7% 32.50

education surtax 3% 13.93

local education surtax 2% 9.29

flood prevention charges 1% 4.64

withholding national tax 10% 773.82

Total: 8202.5

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Jennie Rich, on behalf of UK Trade & Investment in SW1H.

Dear Renata,

Thank you for your question and the additional information.

I've passed this onto my colleagues in the Commercial Section of the British Embassy in Beijing. They will look into the matter for you and post a response.

Regards,

Jennie

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Firstly one should contact the import duty office for China on 0207 215 4827, if they cannot assist you there is a Business Desk China on 0207 215 8446 they only deal with China or contact http://www.hmrc.gov.uk. The Business desk for China is very useful on all sorts of matters so I would try them first, then try UK China Business of Commerce, they may also be able to help you.

Rosa

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Renata -

Firstly it's unclear what is it that you are selling to China. Is it services/products/online technology?
It all depends on whether they are tangibles or intangibles - the taxes are different.
While we know there are a number of dfferent taxes needing to be paid to China for 'products' they are usually wrapped up in the ubiquitious 'witholding taxes' statement.
They have laid out the detail of what is there in this instance, and while the combined amount is not surprising, some of the detail is!
I think you need to speak to the Embassy to get confirmation of all this.
They are suggesting that you add all these to your invoice, which is fine, but then they will make the deductions at their end 'on your behalf' and will they then all be paid in taxes or does it give them an opportunity to buy and pay for your products but part of the cost to the company is 'recovered'? Tricky one to know for sure, but so long as you get your full amount after the tax has been taken off, you'll be fine.
Hope that helps, albeit clouding the water a little more. hey, its' China.....

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David Bill, on behalf of ChemPlex Ltd in EH48.

This looks like an invoice the chinese customer needs to pay to you, rather than one you need to pay to them,

Some Chinese companies try to cheat western sellers of services or goods by trying to get them to pay local Chinese taxes. These taxes have nothing to do with you & they are trying to get you to be complicit in Chinese tax evasion

Have nothing to do with them

David

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