Completely cool! The payment order export ends!

In order to eliminate 'pay orders and exports', the country has made a big move!

On July 7, 2025, the State Administration of Taxation issued the 'Announcement on Optimizing Matters Related to the Prepayment of Enterprise Income Tax Tax Return' (No. 17 of 2025), which will come into effect on October 1, 2025.

This clause clearly states that enterprises that export goods by agency (including market procurement trade, comprehensive foreign trade services, etc.) must simultaneously submit the actual basic information and export amount of the entrusted exporter when reporting. If the enterprise fails to submit it accurately, it will be used as a self-operation method and it will bear the corporate income tax that should be declared and paid for the corresponding export amount. The actual entrusted exporter refers to the actual production and sales unit of the goods.

This shows that through the subject of 'pay order export', customs declaration agency or the actual entrusted exporter must bear the responsibility for corporate income tax declaration, which is a binding clause formulated by the State Administration of Taxation for the chaos of 'pay order export'.

The new regulations have basically completely blocked the loopholes in 'buy order exports' and have a trend of ending the 'buy order exports'.

An agent export company must fill out and apply for the following form:

Severely crack down on illegal operations of 'pay orders and exports', and compliance is urgent

Starting from October 1, 2025 (starting from the third quarter), new tax declaration methods and procedures will be adopted when export companies declare quarterly prepayment of corporate income tax.

The new regulations have revised the 'People's Republic of China's monthly (quarterly) tax return (Class A)' and added a detailed list of three columns of self-operated export income, entrusted export income and export agency fee income, and refined management of export income and clarified the basis for confirming the revenue of agent export business.

This move can better utilize customs big data to compare data. Before Announcement No. 17, the old quarterly reports of domestic and foreign sales coexisting enterprises could not be effectively monitored, and domestic and foreign sales revenue was mixed in the 'Operating Income' column, and it was difficult for the tax bureau to compare and confirm the accuracy of export revenue. The new declaration method can block the missed or less income behavior.

Announcement No. 17 issued a reminder to export enterprises that the state strengthens the monitoring of export enterprises and requires enterprises to comply with policies, operations and declarations. After the goods are exported (including cross-border e-commerce and express delivery), the income must be declared in a timely and accurate manner. The income shall be confirmed by the real owner of the agency export, and the 'payment business' must also be confirmed by the real owner of the goods.

If the tax authorities find that the agent does not know or is unwilling to provide the real owner of the goods, the agent will become the tax replenishment entity and resolutely crack down on false exports, paying orders, low-value reporting, and failure to confirm income on time.

The tax bureau lists the following types of enterprises with abnormal export revenue comparison as high risks:

• Pay the order to export enterprises;

• Agent export enterprises that undertake 'pay order business' cover supply chain, foreign comprehensive services, foreign trade, logistics companies, etc.;

• There are export enterprises that do not issue invoices on time, delay confirmation of revenue from customs declaration, cannot declare exports in the same month (recognition of revenue based on accounting or collection time), have special customs declaration and trade methods (such as sample advertising products and other businesses), and do not confirm export revenue at FOB price.

After the release of Announcement No. 17, the space for illegal operations of export companies has been reduced and the fault tolerance rate has been reduced. Relevant departments of enterprises need to pay attention to business changes brought about by new documents, change subjective cognition, and realize that past edge operations are not feasible. It is recommended that export companies establish risk awareness, eliminate violations such as 'pay order exports' and false exports, standardize their own operations, and achieve trade and tax compliance.

Pay order export impact

Cut off the tax avoidance path: In the traditional 'pay order export' model, the cargo owner borrows other people's export qualifications to declare customs, causing the taxpayer to be free from supervision. The new regulations forcefully disclose information of actual goods owners, allowing tax authorities to accurately track the source producers, completely cutting off this double disconnection chain, so that 'pay order exports' can no longer avoid taxes in this way.

Increase the cost of violation: If the agent fails to fill in the report accurately, the tax authority will directly determine that the export business is its own business, and the agent shall fully bear the corporate income tax. For sellers who 'pay for export' will either be considered as having no export declaration, which is deemed to be supplemented with value-added tax for domestic sales; or they will be supplemented with corporate income tax.

If the head-up company used by the customs declaration bank declares the data, the seller will also be deemed to have not used his head-up export declaration, which is likely to be regarded as a domestic sales supplement for value-added tax and corporate income tax, and the cost of violations will increase significantly.

In the field of foreign trade, it is not uncommon to pay orders and export. It refers to the fact that in order to circumvent restrictions or simplify the process, enterprises purchase complete export declaration materials from enterprises with legal export rights to declare to the customs. This phenomenon is particularly common in the export of low-value and low-tax products such as small commodities, because the export tax rebate amount of such products is low or even no tax rebate. Enterprises can bypass formal processes by paying the order to export, reduce manpower and material investment, and reduce operating costs.

However, paying the order export is extremely harmful. Relevant enterprises often forge or purchase customs clearance documents to conceal export sales income, resulting in the loss of national value-added tax, corporate income tax and related surcharge taxes, and serious circumstances will constitute the crime of tax evasion.

Moreover, unlike small commodities, once bulk products such as steel are involved in paying exports, potential losses and risks will increase in geometric multiples. The amount of bulk products is huge, and the paying export will disrupt their prices, affect the normal balance of supply and demand in the market, disrupt a fair and orderly market environment, and seriously affect the healthy development of the foreign trade industry.

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