I. Tax Compliance Requirements, Rate Determination Standards, and Compliant Invoicing Rules for Three Types of Invoices
(1) Domestic Transport (Trucking) Invoice (9% Special VAT Invoice)
1. Legal Basis State Administration of Taxation Announcement No. 99 [2015]; Caishui [2016] No. 36 – Transport Services Tax Category.
2. Issuing Entity An actual transport company holding a Road Transport Operation Permit. Freight forwarders may NOT directly issue 9% transport invoices. If the forwarder only collects fees on behalf, the actual trucking company must issue the invoice directly to your company.
3. Tax Rate Standard General taxpayers: 9% VAT Special Invoice; Small-scale taxpayers: 3% levy rate, reduced to 1% until December 31, 2027. Issuance as tax-exempt is strictly prohibited.
4. Mandatory Invoice Remarks (Routinely Inspected) The remarks box must clearly state: place of departure, destination, license plate number, and goods description. If too much information, a separate list may be attached; missing any one item renders the invoice non-compliant – not valid for export tax rebate filing, not deductible for corporate income tax, and input VAT cannot be credited.
5. Tax Classification Code Transport Services – Land Transport Services
(2) Customs Declaration Fee Invoice (6% Special VAT Invoice)
1. Legal Basis Business Support Services – Brokerage and Agency Services (not covered by the international freight forwarding tax exemption under Ministry of Finance and SAT Announcement No. 10 [2026])
2. Issuing Entity A licensed customs broker. If the freight forwarder collects declaration fees on behalf, the broker must issue a separate itemized invoice.
3. Tax Rate Standard General taxpayers: 6% special VAT invoice; Small-scale taxpayers: 3% levy rate, reduced to 1% until December 31, 2027. Tax-exempt issuance is prohibited.
4. Invoicing Requirement Must be issued separately; may NOT be combined with port charges or trucking fees.
5. Tax Classification Code Business Support Services – Customs Brokerage Services. It is recommended to note the corresponding customs declaration number in the remarks for easier tax authority matching.
(3) Port Charges Invoices (Yard/Lifting/Documentation/THC, etc.)
1. Legal Basis Logistics Support Services – Port and Dock Services. These occur at domestic ports and are not cross-border tax-exempt services by nature.
2. Rate Determination (Critical – Differentiate by Circumstance)
Port charges are not universally tax-exempt; they depend on the nature of the service.
| Scenario | Tax Rate | Explanation |
|---|---|---|
| Port charges directly related to international transport (e.g., loading fees, terminal handling charges, essential links in the international freight forwarding service chain) | Qualified for tax exemption | Must meet the exemption conditions under Caishui [2016] No. 36 |
| Port charges for imported goods or for general port services (e.g., storage, documentation fees, THC, etc.) | 6% taxable | Not within the international freight forwarding exemption scope |
Key Criterion: Whether the port charges fall under “handling transport, loading/unloading, warehousing, and vessel port entry/exit, pilotage, berthing, and related procedural activities for the client.” If they fall within this scope and meet exemption conditions, a tax-exempt ordinary invoice may be issued; otherwise, a 6% special VAT invoice should be issued.
3. Issuing Entity May be issued by the freight forwarder or port operator, but must separately itemize port charge details.
4. Invoicing Requirements The description must NOT be vaguely stated as “service fees”; itemize as: port charges, terminal handling charges, lifting fees, storage fees, documentation fees. Attach a detailed breakdown list corresponding to the customs declaration batch, noting the declaration number and port of departure.
5. Tax Classification Code Logistics Support Services – Port and Dock Services.
6. Special Case – Waiving Exemption Enterprises providing international freight forwarding services may waive the tax exemption. Upon waiver, general taxpayers may issue 6% special VAT invoices. Some export enterprises seeking input VAT credits may request the forwarder to waive exemption and issue a special invoice.
(4) Quick Three-Step Self-Check for Correct Tax Rate Issuance
1. Distinguish Service Location and Nature:
- Only international sea/air freight booking agency services (domestic port to foreign port) are allowed to issue tax exempt ordinary invoices under “International Freight Forwarding Services”.
- Factory-to-domestic-port trucking and customs declaration are domestic taxable services; they MUST carry a tax rate and have no exemption eligibility.
- Port charges must be differentiated: those directly linked to international transport may be exempt; general port services are taxable at 6%.
2. Verify Tax Classification Codes (Post 2026 VAT Law Adjustments):
From January 1, 2026, under the new VAT Law, the former “Modern Services” and “Life Services” categories have been merged into the “Production and Life Services” major category.
- Trucking: Transport Services – Land Transport Services = 9%.
- Customs Declaration: Business Support Services – Customs Brokerage Services = 6% (formerly under Modern Services, now under Production and Life Services).
- Port Charges: Logistics Support Services – Port and Dock Services = 6% (formerly under Modern Services, now under Production and Life Services).
- Only international booking agency fees: International Freight Forwarding Services = tax exempt.
3. Distinguish Issuer Business Qualification: Freight forwarders may only claim exemption for international booking services. Forwarders without transport operation qualifications may NOT issue 9% transport invoices. Customs declaration and port ancillary services follow the above rules to determine taxable or exempt status.
II. Common SME Violation: Freight Forwarder Issuing a Single “Tax Exempt Service Fee” Invoice for All Services – Full Tax Audit Consequences
(1) Direct Impact on Export Tax Rebates (Primary Audit Target)
1. Current Rebate Rejection / Suspension Non compliant filing documents trigger system level blocking of rebate applications; first time rebates or enterprises under enhanced monitoring will face suspension until compliant invoices are obtained.
2. Clawback of Already Paid Rebates Tax authorities can retroactively review up to 3 years and demand full return of previously granted rebates, plus late payment penalties (0.05% per day) calculated from the date the rebate was credited.
3. Downgrade and Risk Listing Frequent non compliant documents lead to a downgrade in export rebate credit rating, requiring manual verification for each subsequent application and prolonged review cycles. Severe cases may suspend export rebate eligibility for 6 12 months.
(2) VAT Input and Filing Risks
1. Full Input Reversal + Additional VAT & Surcharges If a tax exempt invoice covering 6%/9% taxable items was mistakenly claimed as input credit, the credited amount must be fully reversed, and VAT, urban maintenance and construction tax, education surcharges, and local education surcharges must be repaid.
2. Invoice Designated as Abnormal Certificate If the freight forwarder is found to have improperly claimed exemption or issued invoices incorrectly, the entire set of tax exempt invoices will be flagged as abnormal – your company may not claim input credits nor use them as cost documentation.
3. Joint Liability for Facilitating Violation Knowingly accepting tax exempt invoices for trucking, customs declaration, or port charges that are taxable, the tax authority may deem that your company tacitly allowed the issuer to evade VAT, leading to concurrent penalties for both parties.
(3) Corporate Income Tax Deduction Risks
Non compliant tax exempt invoices are invalid under the “Measures for the Administration of Pre tax Deduction Vouchers” and cannot be deducted for corporate income tax. The corresponding expenses must be added back to taxable income, with additional CIT and late payment penalties. Large adjustments may trigger a separate CIT audit.
(4) Severe Cases – Risk of Fictitious Invoices
Mixing taxable revenue into tax exempt revenue to underpay substantial VAT constitutes tax evasion + incorrect invoicing. For larger amounts, the case is transferred to the tax inspection bureau, with administrative penalties for the enterprise, CFO, and legal representative; serious cases may be referred for criminal prosecution.
III. Official Tax Authority Clarifications (Key Policy Extracts)
1. Differentiate Domestic Taxable Services from International Exempt Services (Ministry of Finance & SAT Announcement No. 10 [2026]) From January 1, 2026, to December 31, 2027, VAT exemption applies to direct or indirect international freight forwarding agency services. Exemption is limited to pure cross border booking agency services; domestic trucking and customs declaration are NOT exempt. Port charges qualify for exemption only if directly related to international transport. If not separately accounted, the entire revenue loses exemption eligibility.
2. Mandatory Itemization for Export Rebate Documentation (SAT Export Rebate Administration Announcement) Retained filing documents must include itemized, rate matched transport, customs declaration, and port invoices. Bundled invoices, rate mismatches, or missing remarks are not recognized as valid supporting documents.
3. Invoice Issuance Must Match Economic Substance (VAT Invoice Management Measures) Invoice descriptions and tax rates must correspond to the actual service type. Issuing a blanket “International Freight Forwarding Service Fee” to mask domestic taxable fees is prohibited. The “four consistency” – business flow, funds flow, invoice flow, and logistics documents – is the core audit standard.
4. Mandatory Remarks on Transport Invoices (SAT Announcement No. 99 [2015]) Invoices for transport services without remarks for place of departure, destination, and license plate number are directly deemed non compliant – no input deduction, no pre tax deduction, and invalid as rebate evidence.
IV. Full Compliance Action Plan for Export Enterprises (Audit Ready Steps)
Step 1: Split Business Contracts and Agree on Invoicing Rules Upfront (Root Cause Prevention)
1. When signing logistics agreements with factories/foreign clients, itemize charges separately: domestic trucking, customs declaration, port charges, international sea/air freight – each with unit price and amount.
2. Include a compliance invoicing clause in the contract:
- Domestic trucking: actual carrier issues 9% special VAT invoice with complete transport remarks.
- Customs declaration: licensed broker issues separate 6% special invoice.
- Port charges: itemized 6% special invoices with breakdown.
- Only the international booking segment may have tax exempt ordinary invoices.
- Explicitly reject bundled tax exempt invoices.
3. Settle funds separately through corporate accounts: pay trucking to transport company, declaration fees to customs broker – avoid a single payment covering mixed charges.
Step 2: Enforce Itemized Invoicing with Downstream Suppliers
- 1. Cooperate trucking companies: verify road transport qualification; require 9% special invoice with complete remarks; do not engage unqualified carriers.
- 2. Cooperate customs brokers: settle and invoice declaration fees separately – 6% special invoice; must not be bundled into the forwarder’s exempt invoice.
- 3. Port/yard settlements: separately account for each port charge item; determine exempt vs. taxable based on service nature; for general port services, require 6% special invoices; for those directly linked to international transport and meeting exemption conditions, accept tax exempt ordinary invoices.
Step 3: Finance Three Check Review Before Booking and Rebate Filing
1. Tax rate verification: Trucking = 9%; Customs declaration = 6%; Port charges – assess by nature; International booking – tax exempt allowed. Trucking and customs declaration must NEVER accept tax exempt invoices.
2. Invoice content verification:
- Transport invoice: remarks with departure, destination, vehicle type/plate, goods description.
- Customs/port invoices: clear description, attached breakdown, remarks with declaration number.
3. Four flow matching: Invoice amounts, service items, contract, bank statements, and supporting documents (trucking waybill, customs declaration, port receipts) must correspond. Retain all documents for 10 years (increased from 5 years effective January 1, 2026).
Step 4: Remediation of Existing Non Compliant Invoices (Historical Fix)
- 1. Review all past “all in one tax exempt service fee” invoices; split them into: international segment (exempt), trucking (taxable 9%), customs declaration (taxable 6%), port charges (case by case).
- 2. Contact downstream forwarders, carriers, and brokers to reverse (red stamp) the original exempt invoices and re issue the correct rate specific special invoices.
- 3. For already claimed input and expensed exempt invoices, reverse input credits and adjust corporate taxable income accordingly. Amend prior VAT and CIT filings, proactively pay back taxes and late penalties to mitigate enforcement penalties.
Step 5: Document Archiving for Audit Readiness
For each export transaction, maintain a separate file containing: service contract, trucking waybill, transport special invoice, customs declaration, declaration fee special invoice, port charge breakdown + invoice, bill of lading, and bank payment receipts. Organize taxable and exempt invoices separately. Retain for 10 years – ready for full presentation upon tax authority visit.
V. Quick Summary – Exempt vs. Taxable at a Glance
| Fee Type | Tax Rate | Key Criterion |
|---|---|---|
| International sea/air freight booking agency fee | Exempt (2026.1.1–2027.12.31) | Domestic port → foreign port |
| Factory → domestic port trucking | 9% special invoice | Domestic transport; exemption strictly prohibited |
| Customs declaration service fee | 6% special invoice | Domestic agency service; exemption strictly prohibited |
| Port charges (loading, terminal handling, etc.) | Case dependent | Exempt if directly related to international transport; 6% taxable if general port services |
| Audit Red Line | 把拖车、报关打包开一张“免税国际货代服务费”发票 | Most typical violation |
VI. Important Policy Timelines
| Policy Item | Effective Period | Legal Basis |
|---|---|---|
| International freight forwarding service exemption | January 1, 2026 – December 31, 2027 | Ministry of Finance & SAT Announcement No. 10 [2026] |
| Small scale taxpayer 3% reduced to 1% | Until December 31, 2027 | Ministry of Finance & SAT Announcement No. 19 [2023] |
| Export rebate filing document retention period | Adjusted to 10 years from January 1, 2026 | SAT Announcement No. 5 [2026] |
Special Note: The international freight forwarding tax exemption is not permanent – currently valid until December 31, 2027. Enterprises should monitor subsequent announcements for policy extensions or changes to avoid transition related compliance risks.
Post time: Jul-09-2026