Import of goods from China - what is worth knowing?

Service-Tax

Entrepreneurs, wishing to increase the competitiveness of their companies, more and more often decide to import goods from China. As with purchases from other non-EU countries, goods must be cleared through customs. Before deciding to cooperate with a Chinese contractor, read our article and find out what formalities should be completed and what to pay attention to!

Checking the reliability of the client

Attractive prices offered by Chinese contractors often obscure the eyes of entrepreneurs and they forget to check their reliability before starting commercial cooperation. In the case of Chinese contractors, it is often necessary to make a prepayment, therefore it is worth checking on the Internet whether other Polish entrepreneurs do not cooperate or have not cooperated with a given contractor and what their opinions are about it.

Long-term companies will be easy to find on various types of internet forums. A good opinion is not a guarantee that our cooperation with a given contractor will also be easy and fruitful, but they allow for the initial rejection of dishonest entrepreneurs.

Import of goods from China - quality of goods

It is detrimental to say that Chinese goods are of poor quality. The Chinese produce both high-class and low-class goods, but the imported ones often turn out to be the latter. It is caused by the price, goods of such quality are cheap, and therefore, after checking them and bearing the related costs, they are able to compete with domestic products in terms of their prices (disregarding the quality criterion). The high-quality ones are close to Polish prices, so bringing them home is unprofitable.

Therefore, before buying, you should check what quality goods are offered by the Chinese contractor and whether they meet our needs.

Form of payment and available currencies - import of goods from China

Before starting cooperation with a Chinese contractor, it is also necessary to check in what form the payment should be made. You may need a credit card. Transactions with China are usually made in US dollars, so if we focus on permanent cooperation, it will be an advantageous solution to open a foreign currency account. This will be a better solution, because when making foreign payments from a PLN account, banks use their own conversion rates, which are usually very unfavorable for the account holder.

However, in a situation where transactions with a Chinese counterparty will be concluded sporadically, setting up a foreign currency account may turn out to be unprofitable, because its maintenance is quite expensive.

It is worth mentioning that the differences between the value on the invoice issued in a foreign currency and the amount actually paid constitute exchange differences that must be shown in tax settlements, depending on the result on the side of revenues or costs.

The waiting time for goods imported from China

When concluding transactions with a Chinese contractor, the waiting time for the ordered goods should also be taken into account. The goods can be shipped immediately, however, the delivery period depends on the adopted method of transport, it is also possible that the purchased goods are only at the production stage, and the expected shipment will take place in a few months.

Therefore, before starting cooperation, it is worth checking the terms of delivery - how long it will take and information about the adopted form of transport (sea, air, rail).

How the transaction is documented

Before starting cooperation, the entrepreneur should also determine how the transaction will be documented. Receipt of a correctly issued invoice will be the basis for recognizing the expense in costs. It is worth determining in advance the language in which it will be issued, because, for example, the one in English will be easy to translate, however, to translate an invoice in Chinese, you will probably need to incur an expense for a translator.

The invoice should include:

  • full details of both parties to the transaction,

  • document number and date of issue, date of sale (if known at the time of shipment),

  • information about the goods: name, quantity, unit prices, total value of the delivery.

Entrepreneurs who settle accounts on the basis of the KPiR should also remember that the confirmation of payment itself does not constitute the basis for recognizing the expense in costs, for this purpose a properly issued invoice is required.

The printout of the order made on the portal and the confirmation of the transfer are not sufficient accounting documents to include the expense in tax costs. Confirmation of such proceedings is the individual interpretation of the Director of the Tax Chamber in Poznań, ref. No. ILPB1 / 415-37 / 13-2 / AA of March 25, 2013, in which we read that: “(...) the document constituting the basis for recognizing economic operations in the tax book of revenues and expenses should, as a rule, be an invoice or a bill referred to in § 12 section 3 point 1 of the regulation on keeping the tax book of revenues and expenses. However, in accordance with the above-mentioned § 12 clause 3 point 2 of the above-mentioned regulation, the basis for the entries may also be other evidence confirming the fact of economic operations, including, inter alia, signatures of persons authorized to properly document business operations.

Due to the above, a printed document that confirms the conclusion of the transaction, but does not contain the signatures of persons authorized to properly document business operations, does not meet the requirements set out in the above-mentioned regulation and cannot constitute an accounting document that is the basis for recording the cost in the tax revenue and expense ledger. "

VAT and duty - import of goods from China

To import goods from China, it is not enough just to find a manufacturer or broker.When importing goods from outside the EU, the goods must pass through customs, where VAT and customs duties are calculated due to the value. All documents necessary for clearance must be submitted to the appropriate customs agency. If something is missing, the goods can be sent back to China.

Be careful not to import goods with counterfeit trademarks, because they cannot be sold either on the Polish or European market.

At customs clearance, PZC or SAD documents are issued, which will be the basis for accounting. The amount of customs duties depends on the value of the goods (based on a Chinese invoice), transport and insurance costs and the type of goods. The duty indicated on the document can be classified as company costs, the deduction is also subject to the VAT shown.

Import of goods from China and the place of customs clearance

Imports of goods in commercial quantities may only be carried out by companies or persons running a business. It should be remembered that each importer carrying out trade with foreign countries must have an EORI number assigned by the customs office. It can be obtained by submitting an application for its posting at the nearest customs office and it takes no more than one day.

If we decide to use the services of the Customs Agency, we must authorize it to perform the necessary activities on our behalf before the customs office. The authorization is issued on the appropriate form, which we will receive from the Agency. On granting the authorization, a stamp duty in the amount of PLN 17.00 must be paid - it can be done by the Customs Agency. A situation in which goods are shipped to Poland from the reloading port in Hamburg is very common. In this case, it is important to determine which country the goods were first shipped to. If the German fiscal representative performs all formalities, it means for the Polish entrepreneur that the import transaction will change its character to the intra-Community acquisition of goods. Therefore, counterparties are required to register for VAT-EU and report the transaction in the VAT-EU return. Therefore, in order to correctly settle the transaction with a Chinese counterparty, it is important to determine the country where the customs clearance will be carried out.

Importing goods from China may be profitable for a Polish entrepreneur, but you should remember to check the reliability of the contractor, the quality of the goods offered and the possible need to pay customs duties. Additionally, it is worth making sure that the transaction will be documented with an invoice.