How to issue invoices and handle foreign exchange for domestic clients shipping goods abroad? This seemingly simple question involves foreign exchange verification,Export Drawbackand other operational aspects, where minor errors could compromise compliance. Below, we explain this complex process in an approachable way.

First, such transactions fall underforeign tradea special case of business, despite lacking traditional foreign exchange income. Typically, solutions include:

1. Borrowing forex from other orders:If the company has other regular export orders, it can allocate some forex to offset these non-forex transactions, easing verification with foreign exchange authorities.
2. Supplementing forex via offshore accounts:Another method is to transfer forex from the company’s or affiliates’ offshore accounts to complete verification, offering flexibility for businesses with multiple overseas accounts.

For small-value transactions, authorities usually won’t scrutinize minor forex discrepancies, allowing normal rebate applications without excessive worry. However, compliance should never be neglected.

Invoicing and Rebate Details

Strictly speaking, forExport Clearancethe customs declaration must bear your company’s name, matching the input invoice. Here, you issue no VAT invoice to the domestic client but apply for an export rebate, which requires corresponding forex receipts as a compliance condition.

Without forex income? You must balance the books. Theoretically, exports without forex are treated as domestic sales, incurring 13% VAT. However, with input invoices, the 25% corporate tax is waived, though 25% of the invoice-customs value difference remains payable. While complex, tax authorities often tolerate such cases if accounts appear balanced and reasonable.

Practical Approaches in Operations

In practice, many businesses adapt flexibly. The key is balancing compliance with operational needs, as regulators allow some leeway for non-violative adjustments.

In summary, forex verification and invoicing for domestic-client exports require adaptable solutions—leveraging other orders’ forex or offshore accounts—while maintaining clear records to ensure audit readiness.