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The issue of DDP export tax rebate in Shanghai
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TRACKING NO. 20260110 / GLOBAL Zhongshen Trade · 23+ Years of Expert Trade Agency
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We are a company based in Shanghai.Enterprise, recently a European client requested delivery under the DDP (Delivered Duty Paid) terms. I want to ask, under the DDP terms, can we still apply forIs that so? How exactly do I do it? I've heard that the customs in Shanghai are very strict about DDP tax refunds. Are there any risks I need to pay attention to?
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
Under the DDP (Delivered Duty Paid) clause，it is possible to apply for export tax rebates，but the key issues are "who actually declares the export" and "whether the documents are compliant". Shanghai Customs indeed conducts stricter audits of tax rebates under DDP，with the main risks including。
1. The "domestic consignor" on the customs declaration must be your company，and the operating unit and declaring unit must be consistent。
2. The shipper on the bill of lading or waybill should be listed as your company. If it shows a freight forwarder or overseas buyer，you need to clarify in the documents that your company is the actual shipper。
3. The information on the VAT invoice，customs declaration，and foreign exchange settlement document must be fully consistent。
Special reminder: If the freight forwarder appointed by the client operates in an irregular manner，resulting in the transaction method on the customs declaration being CIF or FOB instead of the actual DDP，it will affect the tax rebate. It is recommended that you actively declare the transaction method as "DDP" when declaring and note in the remarks column that "the actual freight and insurance costs are borne by the seller"。
Additionally，Shanghai Tax Bureau now conducts meticulous audits of freight invoices under DDP. If the freight is paid on your behalf，you must obtain compliant international transportation invoices. Otherwise，the export amount corresponding to this portion of the freight may not be eligible for tax rebates.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
From a logistics operational perspective, to successfully obtain tax refunds under the DDP (Delivered Duty Paid) clause, it is essential to ensure clear document flow. Firstly, we recommend selecting a reputable international freight forwarder based in Shanghai and explicitly requiring them to conduct "double-headed customs declaration", where the domestic consignor is listed as your company on the customs declaration form, with the freight forwarder acting as the declaring entity. Secondly, it is advisable to use original bills of lading for sea or air freight rather than express waybills, as original bills of lading better substantiate ownership of the goods. Thirdly, freight and insurance costs must be itemized separately. Although DDP is a door-to-door price, customs declarations must distinguish between the value of the goods, freight charges, and insurance premiums to enable tax refund calculation based on the value of the goods. In practice, many clients overlook one key point: if you authorize the freight forwarder to pay destination port duties under DDP, these duty invoices cannot be used as cost deductions or affect the tax refund base. Regarding timeline, normal customs clearance for DDP declarations at Shanghai ports takes 1-2 working days, but tax refund review may require 3-5 additional days compared to ordinary FOB (Free on Board) declarations, as customs systems flag DDP transactions for enhanced manual review. It is recommended to communicate with the freight forwarder in advance, verify all information during pre-declaration stages, and avoid post-declaration amendments, which severely delay tax refund progress.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
From the perspective of business negotiations, the key to protecting tax refund rights under the DDP clause lies in the refinement of contract terms. You can explicitly stipulate in the contract: "Although the trade term under this contract is DDP, the responsibility for export declaration and the rights to export tax refunds belong to the seller. The buyer shall cooperate in providing the necessary customs clearance documents." In this way, even if the freight forwarder is designated by the client, you will have a contractual basis to require them to operate according to your requirements.
For payment methods, it is recommended to adopt the model of "partial prepayment + payment upon receipt of bill of lading copies + final payment". At least 10-15% of the final payment should be withheld until the tax refund is completed, which will make clients more cooperative in handling documentary issues. If the client insists on using their own freight forwarder, you can add the cost of tax refund risk into the quotation or explicitly inform them that "using the designated freight forwarder may lead to delays in tax refunds, and the corresponding payment schedule will be postponed accordingly".
A high EQ approach would be: "We understand your desire for the convenience of DDP delivery, but to ensure that we can continue to provide you with competitive prices, export tax refunds are very important to us. We hope you can cooperate with our requirements on documentary matters." This not only expresses the sincerity of cooperation but also upholds your bottom line.
In addition, it is recommended that you separately list the "export tax refund rate and estimated tax refund amount" on the PI, so that clients can realize that this is a component of your reasonable profit, rather than an additional charge.