Do I have to pay customs duties and value-added tax for the return of defective products in the bonded zone for recycling? Can I write off tax-free?

Do I have to pay customs duties and value-added tax for the return of defective products in the bonded zone for recycling? Can I write off tax-free?

First, the core sentence conclusion

Regular return of defective goods in the bonded area to the port environmental protection recycling / destruction, the goods completely lose their use value, the whole process of sea closure environmental supervision, get the Hong Kong regular environmental protection disposal certificate, no need to pay customs duties, value-added tax, can directly tax-free verification manual / electronic account.

If you do not do a withdrawal, keep the factory privately and sell domestically without authorization, you will have to pay taxes in full, and will create the risk of punishment.

2. Under what circumstances is it truly tax-free and does not require tax payment?

Customs recognizes tax exemption without any additional import duties upon satisfaction of all the following conditions:

1. Cargo attributes: bonded processing materials, production defective products, quality inspection defective products, scrapped stale inventory, unable to return to work, can not export, prohibited domestic sales;

2. Disposal method: through customs supervision of the vehicle regular declaration returned out of the country, sent to Hong Kong licensed environmental protection agency for crushing, dismantling, harmless recycling, the goods completely lost secondary sales value;

3. Closed loop of procedures: complete retention of customs declaration form, return application form, official Hong Kong sales/recycling report, full sales image record;

4. Customs determination: defective goods have been lost, no residual value in circulation, in compliance with the regulatory rules for the re-exportation of bonded goods.

Brief example

Electronic factory bonded PCB defective boards, scrap chips, damaged plastic finished products, customers reject defective products, uniform declaration of return for recycling and destruction, with a full set of disposal invoices to the customs, direct tax-free verification, no tax compensation.

3. What situations are not tax-free and must be taxed?

1. The goods are intact and available for sale, but merely stagnant, no irreversible destruction, only transshipment to Hong Kong warehouse;

2. Do not go through regular return customs declaration, private transfer, no customs supervision record;

3. Only in the domestic factory area self-discard, simple disassembly, no overseas environmental protection disposal certificate;

4. Improper storage lost, damaged, unable to provide complete return and shipping closed-loop information, customs will recover customs duty + value-added tax according to the original value of the goods.

Duty-free Verification Complete Operational Process (Minimal Version)

1. Organize information: list of defective products, bonded manual/account, description of the situation of defective products;

2. Customs Declaration: Declaration out of the zone in the form of supervision of returned goods, customs on-site weighing inspection;

3. Cross-border transportation: Regulate direct delivery of HK vehicles to Hong Kong environmental recycling base;

4. Harmless disposal: professional crushing and dismantling, the whole process video recording;

5. Issuance of certificate: HKEPA recognized recycling and destruction report, weight slip, image data;

6. Customs verification: The full set of information is submitted to the customs office of the bonded area, and the duty-free office checkout book for verification.

Fifth, answer common questions of enterprises

1. Will the return of recycling have a metal residual value, will it also be taxed?

no. The residual value is uniformly recycled and resourced by Hong Kong environmental protection enterprises. The main body of the goods is scrapped defective goods, no return ️ flow to the mainland for sale, the customs only recognize the overall scrap disposal, no additional taxes and fees.

2. A small amount of defective samples, several boxes of defective products, can also be tax-free for sale?

can. Regardless of the size of the goods, as long as the return is declared regularly and a complete disposal certificate is obtained, the tax-free verification policy will be uniformly applied.

3. What key certificates need to be prepared for tax-free verification?

Return and customs declaration receipt, cargo details, environmental protection sales report by Hong Kong licensed organization, photos and videos before and after sales, weight confirmation form, the full set of information can be verified by customs clearance.

Unqualified defective products in the bonded zone, regular return of environmental protection recycling and destruction, meet the two conditions of closed environmental supervision and thorough scrapping of goods, exemption from customs duties, value-added tax, smooth tax-free verification of processing trade manuals;

Hong Kong Tel: 852-52664790, Leung Kee Recycling Co., Ltd. has passed international standards such as quality management (ISO 9001), environmental management (ISO 14001) and information security management (ISO 27001) certification, safe, regular, professional. One-stop service for recycling and recycling, - look forward to your call to open a new chapter of environmental protection and value!