Do I need to declare the low sulfur surcharge to the customs?

basic situation

In February 2021, Customs H discovered that there was a risk of under-reporting low-sulfur surcharges on imported goods from Company A within its jurisdiction, and immediately carried out an inspection and verification. Relevant shipping agency fee invoices and payment receipts and other documents show that the low-sulfur surcharge item is separately listed in the direct ship arrival notice, and the fee has been actually paid by the importing enterprise. Based on this, the customs determines that the buyer actually owns the goods. Situations where transportation related charges are paid and not declared. The company argued that the declared trade method is CIF (cost plus insurance plus freight), and relevant fees including low-sulfur surcharges are already included in the transaction price and should no longer be levied separately. After customs made policy presentations and legal explanations to the enterprise, the dispute was finally properly resolved and the enterprise paid the relevant taxes in accordance with the law.

Key points analysis

What is the low sulfur surcharge?

Low Sulfur Fuel Surcharge (LSS) is one of many shipping surcharges. It is charged to make up for the increased cost of using low-sulfur fuel for ships sailing in new sulfur oxide emission control areas. Additional fee. In order to support global energy conservation and emission reduction, the international shipping industry, the International Maritime Organization and others have successively introduced ship emission standards, requiring strict control of the sulfur content in ship fuel emissions in emission control areas. Conventional fuel oil in shipping is heavy fuel oil, and the sulfur content is usually higher than the aforementioned standards. In order to comply with the sulfur content requirements of emission control areas, shipping companies must use different types of fuel with higher purity, and often impose low-sulfur surcharges on consignees for this additional cost.

Should the low-sulfur surcharge be included in the dutiable price?

Article 5 of the "Measures of the Customs of the People's Republic of China for Examining the Duty-Paid Value of Imported and Exported Goods" stipulates that the duty-paid value of imported goods shall be reviewed and determined by the Customs on the basis of the transaction price of the goods, and shall include the date when the goods arrive at the place of import within the territory of the People's Republic of China. Transportation and related costs and insurance before unloading. Article 35 stipulates that the transportation of imported goods and related costs shall be calculated based on the costs actually paid or payable by the buyer.

The low-sulfur surcharge is generated by logistics providers in providing transportation services and charges related parties for the use of low-sulfur fuel oil in emission control areas for their ships. This fee is closely related to the transportation process and is charged during cargo handling and unloading. occurred before, so it belongs to the transportation and related expenses described in the "Measures of the Customs of the People's Republic of China for Approving the Dutiable Value of Imported and Exported Goods".

Under normal circumstances, if the imported goods are traded using FOB (free on board) terms and the low-sulfur surcharge is clearly borne by the consignee of the imported goods, it should be included in the dutiable value of the goods and be truthfully declared to the customs. If the transaction method for imported goods is CIF or CNF (cost plus freight) terms, it needs to be determined according to the specific agreement between the buyer and the seller. If it is included in the freight and related fees paid by the foreign seller, it will not be included in the dutiable price; if If it is not included in the freight and related charges paid by the foreign seller and is actually borne by the consignee of the imported goods, it shall be included in the dutiable value of the goods and must be truthfully declared to the customs.

How should companies declare low-sulfur surcharges?

When an enterprise declares to the customs, the low-sulfur surcharge can be reported in the "Miscellaneous Charges" column of the customs declaration form. If the initial declaration is not submitted, the enterprise can make subsequent declarations in the following three ways:

1. After the goods are declared and before release, the enterprise can take the initiative to make a supplementary declaration to the customs and declare the expenses through the electronic supplementary declaration form of the "Customs Supplementary Declaration Management System".

2. After the goods are released, if the customs requires a supplementary declaration, after receiving the price review electronic instruction sent by the customs through the "Customs Supplementary Declaration Management System", the enterprise should submit the electronic supplementary declaration of the expenses through the system within 5 working days. Make a declaration alone.

3. After the goods are released, if the enterprise discovers omissions during self-examination, it can report to the customs through voluntary disclosure in accordance with the "Customs Inspection Regulations of the People's Republic of China" and the "Announcement of the General Administration of Customs on Handling Matters Related to Proactive Disclosure of Tax-Related Violations" declare.

Case Enlightenment

According to relevant laws and regulations, three conditions must be met at the same time for freight to be included in the dutiable price:

1. The costs are related to transportation, which is broadly referred to as "transportation and related costs". Related costs include transportation surcharges, cargo handling fees, warehousing fees, etc.

2. The cost should be calculated until the goods arrive at the import point in the People's Republic of China and are unloaded.

3. This fee is paid by the buyer but is not included in the declared price. Low-sulfur surcharges that meet the aforementioned conditions should be included in the dutiable price. In practice, there is no unified name for the low-sulfur surcharge paid by enterprises to logistics suppliers (shipping companies and their agents, freight forwarders, etc.). There may be low-sulfur fuel surcharge (LSS), fuel oil surcharge (BAF/BUC/BS). ), short-term contract fuel surcharge (EFF), new fuel surcharge (BK), new fuel surcharge (NBAF), global marine fuel recycling surcharge (MFR), sulfur reduced emission fuel oil treatment charge (ISOCC), low sulfur green recovery fee (LGGR), freight increase fee (RR) and other forms. Enterprises should declare relevant expenses to the customs in a timely and truthful manner based on the actual situation of the sales contract and fee payment to avoid legal liability for false declarations.