Newsletter
RECOGNITION OF SALES FOR EXPORT OF MERCHANDISE TO OVERSEAS WAREHOUSE
According to a recent MOF ruling, where a company establishes a warehouse abroad, when the goods are exported to the warehouse, the company should report such a sale, at 0% value-added-tax (VAT), according to the price reported on the export claim statement. If the goods are sold, when filing an annual business income tax return, the company should adjust its sales revenue according to the actual sales price, and enclose a revenue reconciliation statement as well as the physical inventory record, both certi-fied by the local certified public accountant (CPA), for verification.
However, if the company has sent a domestic CPA to the overseas warehouse for physical in-ventory check, and related evidence is available, it is acceptable to verify the actual sales price according to the revenue reconciliation statement and physical inventory record certified by the CPA.
As to the revenue reconciliation statement, no specific format is prescribed; however, it should state (i) the sales amount and quantity filed on the exportation; (ii) the actual amount and quan-tity of sales; and (iii) the adjustment of the dif-ferences between the preceding two categories.