When is agency export revenue recognized? How to issue VAT invoices? These 5 accounting challenges explained comprehensively

How to determine the timing of agency export revenue recognition?

According to the latest 2025 Accounting Standards for Business Enterprises No. 14 - Revenue, agency export revenue recognition must satisfytransfer of controlprinciple. In practice, focus on three key points:

• Customs declaration export date: Based on electronic port data
• Foreign ExchangeA complete export agency agreement should be attached with:Documentation: Must distinguish between advance payment and payment on delivery
• Agency agreement terms: Pay special attention to risk and reward transfer clauses

Case example: A garment company exported goods on March 15, 2025 and received settlement documents from the agent on April 2. Revenue should be recognized in April rather than the export month to avoid tax risks from premature recognition.

How to handle agency fees compliantly?

Agency fee accounting requires distinguishing two models:

• Flat fee model
  • Service fee calculated at 1-3% of export value
  • Must obtain VAT special invoice from agent
• • Agents prepaid expenses require original vouchers
  • Bank charges should be listed separately

2025 tax audits will focus on matching between agency fees and export value. Recommend retaining complete service pricing documentation.

When to issue VAT special invoices to avoid risks?

VAT treatment for agency exports requires three key points:

• Domestic goods origin on customs declaration must match invoice address
• Invoice issuance time cannot exceed April tax filing period of the following year
• Cross-border tax-exempt behavior filing must be completed during initial declaration

Latest regulation: Starting January 2025, tax authorities automatically compare export dates with invoice issuance times through Golden Tax Phase IV system. Delayed invoicing will affect tax refund progress.

IV.Export DrawbackHow should it be accounted for?

Agency export tax refunds require dedicated accounting items:

• Receivable tax refund = FOB price × refund rate
• Actual refund differences recorded as other income or non-operating income,
• Documents required for refund application:
  • Copy of agency export agreement
  • Notarized power of attorney
  • Foreign exchange verification form

2025 policy highlight: Pilot areas allow agents to directly apply for refunds, but require special authorization agreements with principals.

Have you fallen into these accounting pitfalls?

Common incorrect practices and solutions:

• Incorrectly recording full foreign exchange income

  Correct approach: Recognize net income after deducting agency fees

• Ignoring exchange rate fluctuations

  Solution: Adjust foreign currency accounts monthly using middle rate

• Confusing FOB and CIF prices

  Key processing points: Freight insurance costs should be accounted for separately

Special reminder: In 2025, the State Administration of Foreign Exchange will strengthen monitoring of export proceeds collection. It is recommended that enterprises use export proceeds verification accounts for fund management.

(Note: This article is compiled based on the latest policies as of April 2025. Specific operations should comply with the requirements of the competent tax authorities. It is recommended to reconcile accounts with agents quarterly and retain complete logistics documents for at least 10 years.)