What export type does processing trade actually belong to?

According to the 2025 revised edition of Customs Processing Trade Management Measures, processing trade belongs toProcessing tradeScope, distinct from general trade exports. Core characteristics include:

• Domestic enterprises accepting overseas commissions for processing with supplied materials
• Ownership of raw materials always remains with the overseas consignor
• Finished products must be 100% re-exported

How does Customs distinguish processing trade from general trade?

After the 2025 Customs supervision system upgrade, identification will primarily be based on three dimensions:

• Document of title: Processing trade requires submission of bonded materials filing list
• Fund flow direction: Only processing fees are charged, excluding raw material value
• Customs clearance method: Must use special processing trade manual for declaration

Does processing under commission require an export license?

Determined under two circumstances:

• If processed products fall undernon-restricted commodities: No export license required
• If involvingdual-use items/military products catalogcommodities:
  • Must obtain Processing Trade Business Approval Certificate,
  • Submit end-user and end-use certificates

How is VAT handled for processing trade?

According to Ministry of Finance Announcement No. 38 of 2025:

• Processing with imported materials implementsexemption, credit, and refundpolicies
• Processing with supplied materials based onprocessing fee amountTax - free
• Deep processing transfer requiresspecial VAT payment certificate

What are the common compliance risks in contract processing?

Customs inspection cases from the past three years reveal the main risk points:

• Inaccurate declaration of material consumption(37.2% share in 2024)
• Irregular disposal of leftover materials(Average fine: 280,000 RMB per case)
• Unauthorized domestic sales of bonded goods(Criminal case filing threshold: goods value of 500,000 RMB)

How to choose a processing trade cooperation model?

Recommendations based on actual enterprise conditions:

• Processing with Supplied Materials: Suitable for newly established small and medium-sized enterprises
• Processing with Imported Materials: Suitable for large enterprises with procurement channels
• Bonded maintenance: New pilot industry in 2025

What should be noted in processing trade manual verification?

General Administration of Customs will strengthen three verifications in 2025:

• Discrepancy rate between actual inventory and system data ≤3%
• Production loss rate must not exceed 20% of registered value
• Finished product export must be completed before manual expiration

Contract processing can apply forExport DrawbackAccording to Document No. 38 of the State Administration of Foreign Exchange in 2025,

Key differences in tax refund eligibility conditions:

• Processing with Supplied Materials: Only processing fees are tax-exempt
• Processing with Imported Materials: Can refund VAT on domestically purchased auxiliary materials
• Special circumstances: Requires re-filing for principal changes