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For cross-border e-commerce companies seeking export tax refunds, the “0110” (general trade) regulatory model is a path that is both tempting and thorny. It serves as the centerpiece of traditional foreign trade and provides a proven framework for tax refunds. However, when this model designed for B2B bulk trade is directly applied to high-frequency, fragmented B2C cross-border e-commerce business, a series of compliance challenges and practical problems will ensue. This article will systematically sort out the core problems encountered by enterprises and financial personnel under the “0110” model and provide targeted solutions.

First, cross-border e-commerce application of the 0110 model of the three major tax rebate pain points

Cross-border e-commerce sellers in the application of the 0110 model, the pain points often do not exist in isolation, but like dominoes to trigger a chain reaction. The following three cases are respectively for the “ticket without remittance”, “remittance without ticket” and “ticket and remittance discrepancy” three core dilemmas.

Case 1: [Tickets without remittance] - “perfect” export, but can not get a refundtoll

Scenario: Shenzhen Company A (domestic subject) purchased goods worth 1 million RMB from a factory, and obtained full VAT invoices; Company A declared exports to the Customs in the mode of 0110, and the “overseas consignee” in the customs declaration was filled in as Company B in Hong Kong (a company controlled by the founder). After the goods were sold in Amazon, about 180,000 dollars of sales money was directly settled by the platform to the account of Hong Kong Company B. Company A in China did not receive any foreign exchange payment. No foreign exchange was received in the account of company A in the territory.

Result: Company A applied for 130,000 RMB export tax rebate, and the tax bureau requested to provide the water bill of exchange. Because the main body of customs declaration is Company A and the main body of collection is Company B, which belongs to the “single, remittance discrepancy”, the application for tax rebate was rejected.

Case 2: [remittance without a ticket] - money back, but the company to “bankruptcy”!

Scenario: Hong Kong Company B will collect the sales proceeds and remit them in the name of “Payment for Goods” to the domestic Company A. Company A successfully collects the remittance and meets the requirement of “single and remittance” consistency. However, most of the purchases made by Company A do not have invoices, and there are very few costs that can be deducted before tax.

Result: Company A has book revenue of 10 million yuan, book cost of only 1 million yuan, and book profit of 9 million yuan, which is subject to corporate income tax of 2.25 million yuan (9 million × 25%). While the real gross profit is only 2 million yuan, according to the real profit only need to pay 500,000 yuan of tax. The inflated tax burden caused by the absence of invoices is difficult for the company to bear.

Case 3: [Bills and remittances do not match] - the details of the “devil”

Scenario: Company A exports a batch of goods with a declared amount of US$200,000 to Company B and obtains a full input invoice. Company B remits the US$200,000 payment back to Company A on a public-to-public basis after selling the goods on Amazon. However, the legal representative of the payer (Company B in Hong Kong) and the payee (Company A in China) are the same person, which constitutes a connected transaction.

Result: The bank asked for the pricing basis to prove the fairness; the tax bureau recognized the transfer pricing problem and believed that the domestic company sold the goods to the Hong Kong company at a small profit, and the profit stayed in Hong Kong to avoid tax. The enterprise faced the risk of audit.

Warm tips: The above three types of pain points are the most common “roadblocks” in cross-border e-commerce 0110 tax refund. There are bills without remittance, remittance without bills, bills and remittances do not match, any one of the errors will lead to tax refund failure or tax risk. Want to get targeted solutions and architecture optimization suggestions? Sweep the code to add WeChat jxhcyb, we one-on-one diagnosis!

II. Fundamental Conflicts and Challenges of Applying 0110 Model in Cross-border E-commerce

1. Conflict between model applicability and business substance

0110 is essentially designed for B2B bulk trade, while most of the cross-border e-commerce business is essentially B2C. Sellers have to set up offshore companies (e.g., Hong Kong companies) to act as intermediaries, and transform the business process into the B2B2C model of “domestic company → offshore company → offshore consumers”, which increases the complexity of the company structure and transaction links. This increases the complexity of the company structure and transaction process.

2. Financial and tax compliance challenges

Difficulty in realizing the unity of four documents: Compliance with tax rebates requires the unity of four documents: goods, bills, documents and remittances. Under the B2B2C mode, the payee is often inconsistent with the overseas purchaser on the customs declaration, which makes it difficult to meet the requirement of “whoever exports, whoever collects foreign exchange”.

Invoicing issues: Some purchases could not obtain compliant VAT invoices, resulting in insufficient input tax for a full refund.

Accounting and management complexity: fragmented order data and customs declarations, invoices, collection and remittance of water bills matching workload and error-prone.

High tax risk: In order to solve the problem, it may adopt non-compliance behaviors such as buying orders for export, fictitious trade, etc., and face administrative penalties or even criminal liabilities.

3. Cost and efficiency issues

It costs money to set up and maintain an offshore company, and hiring professional tax services is also an expense. At the same time, 0110 “every single must be reported” and complex underwriting process, for small batch, high-frequency retail export efficiency is low.

Third, why stick with the 0110 model?

Despite the difficulties, larger sellers persist in adopting the 0110 model, with the core driver being access to export tax rebates.

Directly thicken the profit: the tax rebate is pure profit. For example, a purchase of 1 million yuan (excluding tax), a tax rebate of 130,000 yuan, may account for 30%-50% of the total profit. to give up the tax rebate is equivalent to directly give up a large chunk of profit.

The inevitable choice of business scale development: regular suppliers can issue VAT invoices, and sellers naturally have a “bill” basis for applying for tax rebates.

Other models can not be completely replaced: 9610, 9710, 9810 and other models still have a gap with 0110, which has been running for decades, in terms of the smoothness of the tax refund process and the maturity of the system.

Large amount of funds compliant repatriation: B2B2C structure is the best solution to solve the large amount of sales money compliant inbound, avoiding the risk of gray settlement.

Characteristics of sellers for which the 0110 model is applicable: large annual sales (e.g., millions of dollars or more), formal supply chain (ability to obtain input invoices), offshore corporate structure, profit maximization and operational security.

IV.0110 The whole process of export tax rebate

Phase I: Two major foundational preparations

Preparation 1: Enterprise qualification and official record

Completion of import and export business license, customs registration, electronic port, foreign exchange directory registration, tax refund (exemption) filing

Preparation 2: Compliant B2B2C transaction structure

Domestic subject (Company A): Exporter and tax refund claimant

Offshore subjects (Company B): offshore buyers and platform payees (usually Hong Kong companies)

Phase II: Four core operational steps

Step 1: Obtain compliant input invoices (tickets)

Domestic Company A enters into a purchase contract with a domestic supplier, pays the tax-inclusive payment for the goods, obtains VAT invoices with names, quantities and amounts that are exactly the same as the actual ones, and completes the checking and certification within the stipulated period.

Step 2: Completion of compliant export declarations (goods, documents)

Company A in the territory and Company B outside the territory signed a Contract for Export Sales and commissioned the customs broker to declare in 0110. Obtain "Export Goods Declaration", key information: domestic consignor fill in Company A, overseas consignee fill in Company B, the amount declared is consistent with the contract.

Step 3: Completion of compliant collection write-off (remittance)

The platform will be settled to the sales of foreign company B account, company B in the name of “payment for trade goods” public to public to pay foreign exchange account of company A, the amount of foreign exchange, and the amount of customs clearance is consistent with the company A to the bank to provide customs declarations, contracts and other materials for the collection of foreign exchange, access to the “foreign-related income declaration”, the transaction code selection Under "Trade in Goods".

Step 4: Make an export tax refund declaration (refund)

The financial personnel will match the data of customs declaration and input invoice through the tax rebate declaration system, generate declaration data and submit them. The declaration period is from the month following the date of goods declaration for export to the end of April of the following year. After the tax bureau passes the audit, the tax refund will be allocated to the enterprise's account.

Warm reminder: In the process of 0110 tax refund, the “overseas consignee” in the customs declaration must be filled in the overseas intermediate company (Company B), and the payer must be the same Company B when receiving foreign exchange, and the transaction code is “Trade in Goods”. Any mistake may lead to tax refund failure. Want to get four single verification list and B2B2C structure agreement template? Scan the code to add WeChat jxhcyb, we send you detailed information!

We provide domestic (Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, etc.) company registration, overseas (Hong Kong, the United States, Japan, the United Kingdom, Singapore, Thailand, Vietnam, etc.) company registration, Hong Kong identity application and renewal services, as well as covering the cross-border tax planning, shareholding structure design, compliance and risk control programs, and other full chain of corporate services.

Feel free to contact me anytime you need me at:18148556832, microsoft:jxhcyb(can be added by searching directly) or scan the QR code below to add

put at the end

0110 mode export tax rebate is an effective path for cross-border e-commerce enterprises to realize profit enrichment and capital return in a compliant manner, but they face the three major pain points of having a ticket but no remittance, having a remittance but no ticket, and having a discrepancy between the ticket and remittance. Core solution: establish a compliant B2B2C transaction structure (domestic company A + overseas company B), ensure that the four documents of “goods, ticket, bill and remittance” are one, the overseas consignee of the customs declaration is filled in company B, and the remittance is received from company B and the transaction code is trade in goods. At the same time, pay attention to the transfer pricing risk to avoid related transactions being recognized as profit transfer. For enterprises with a formal supply chain and a certain scale, the profit enhancement and capital compliance value brought by 0110 tax rebate is much higher than its operation cost. It is recommended to plan the structure in advance and entrust the assistance of a professional tax team to ensure compliance at every step.

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