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Non-trade foreign exchange payment for foreign exchange in various countries


Non-trade foreign exchange payment for foreign exchange in various countries


Issuing tax vouchers for foreign exchange payments for non-trade and part of capital projects.

非貿匯出煮標 100 1

Ⅰ.The concept of non-trade proof Explain in detail

  • Non-trade foreign exchange payments refer to payments made by domestic enterprises when overseas enterprises or institutions generate service income or obtain profits, interest, rent, royalties and other income from domestic sources, as well as income related to capital projects. An act of foreign exchange.
  • When domestic institutions (referring to companies, enterprises, government agencies and various organizations, etc.) and individuals handle foreign exchange purchase and payment procedures under non-trade and some capital projects, they must submit a tax payment certificate for the income issued by the tax authority to the bank.
  • Non-trade foreign exchange payments are items that multinational companies often need to handle and urgently need to understand. For multinational companies, how to deal with the following issues is particularly important:
  1. What payment methods are available and how to formulate the best payment plan?
  2. What is the focus of the tax bureau’s verification of tax payment certificates for enterprises’ external foreign exchange payments?
  3. How to understand foreign exchange payments from the perspective of economic background and management habits of multinational enterprises?

Ⅱ.Scope of non-trade proof

Non-trade refers to transactions other than trade in goods under the current account, including trade in services, income and unilateral transfers.

  • Offshore companies use intangible assets such as trademarks, patents, and proprietary technologies to onshore companies to collect royalties from domestic companies.
  • The offshore company provides unified management services to the group’s internal companies (including onshore companies), and charge management fees from the service companies according to the group’s unified standards to compensate the fee of their unified management activities.
  • The offshore company provides specific services to the onshore company in accordance with the service agreement and charges a service fee. Relative to management fees, service fees are often more targeted and often related to specific projects, such as onshore company employee training.
  • After the offshore company helps the onshore company to pay the salaries, insurance, and welfare of foreign employees, then the onshore company will be charged to ensure the confidentiality of the foreign employees’ salaries and related expenses. In addition, offshore companies organize and arrange R&D, training, advertising, and software development in domestic organize, and apportion to companies (including domestic companies) according to certain standards after unified payment.
  • Offshore individuals’ remuneration for work in the country, offshore institutions or individuals receive dividends, profits, direct debt interest, guarantee fees, and other income and other frequent transfer projects.
  • Financial lease rentals, real estate transfer income, and equity transfer income obtained by offshore institutions or individuals from domestic.

Ⅲ.Types of tax involved in the non-trade proof


Personal Income Tax


Business Tax or VAT

Additional Tax 

1. Personal Income Tax  
Business Tax or VAT
Additional Tax

IV.Application for non-trade foreign exchange payment in various countries

Non-trade exchange payment in China 

  • When an overseas enterprise or institution (non-resident enterprise) collects non-trade income from a domestic enterprise, the domestic enterprise shall withhold the tax at source before paying the contract payment (the tax shall be withheld by the withholding agent from the payment or when payment is due). The amount payable when due shall be withheld), and the payer shall be the withholding agent.
  • This type of “non-trade and partial capital projects” foreign exchange payment, the business of issuing tax vouchers is called “non-trade certificate issuance”, the full name is “submission of tax vouchers for foreign exchange sales and payments under non-trade and partial capital projects”.
    The basic process of non-trade foreign exchange payment in China mainly consists of four steps:

1. Contract filing
2. Tax determination
3. Tax declaration
4. External payment: The payer goes to the corresponding bank to make external payment.

  • Special Reminder: The withholding agent should go to the competent tax authority to withhold and pay the relevant taxes within 7 days of payment or due payment. If the enterprise has not made the identification of relevant tax types for withholding and payment, it can go to the Electronic Taxation Bureau in advance Do a good job in determining tax types. There is no need to re-identify corporate income tax after it has been identified. Value-added tax must be identified separately for different tax items.

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