Detailed explanation of property tax, L/C certification and insurance in cross-border e-commerce

Analysis of property tax collection objects and tax rates

Real estate tax mainly targets houses, and its collection scope is limited to cities, counties, incorporated towns and industrial and mining areas, and rural areas are not included. The taxpayer is the property owner of the house, and a proportional tax rate is applied. According to the tax law, there are two basis for tax calculation: one is to calculate tax based on the residual value of the property (referring to the balance after deducting 10% to 30% of the loss value from the original value of the property in one go according to the tax law), and the applicable tax rate is 1.2% ; The other is to calculate tax based on property rental income, and the tax rate is 12%. It is worth noting that currently, if an individual’s residential property is still rented out for residence, the property tax is levied at a reduced rate of 4%; similarly, the housing used for residence by enterprises, institutions, social groups, and other organizations at market prices is also levied at a reduced rate of 4%. Real estate tax is levied at a reduced rate of 4%.

For example, assume that Company A, a small-scale enterprise, owns a property for its own office use, with the original value of the property being 8 million yuan; and the other property is rented out for people to live in, with an annual rental income of 150,000 yuan. . According to the current policy, from January 1, 2022 to December 31, 2024, according to the “six taxes and two fees” preferential policy, Company A can enjoy a 50% reduction when calculating the property tax payable. The specific calculation is as follows:

• Amount of tax payable on self-occupied property = [800×(1-20%)] × 1.2% × 50%;
• Amount of tax payable on rental income = 15 × 4% × 50%.

L/C certification process and precautions

After receiving the letter of credit (L/C), if the supplier needs to make modifications such as extending the shipping period and the validity period of the L/C or changing the shipping terms, it first needs to obtain the consent of the importer, and then the original L /CThe applicant submits a modification application to the bank. The application must detail the specific terms to be modified, such as changing the latest shipment date from October 16, 2022 to November 16, 2022.

After receiving the modification application, the original issuing bank needs to retrieve a copy of the original L/C for verification, and issue an L/C modification notice to the relevant parties in accordance with the requirements of the application. In addition, it should be noted that the party responsible for the modification fee depends on the reason for the modification: if it is due to the seller’s fault that the certificate needs to be modified, the cost will be borne by the seller; conversely, if it is due to the importer’s error in issuing the certificate and needs to be modified, then The cost of changing the certificate is usually borne by the importer.

Types of foreign trade insurance and their coverage

In order to avoid potential risks during international cargo transportation, traders often purchase insurance for higher-value goods. Insurance categories mainly include basic insurance and additional insurance. The former covers Ping An Insurance (F.P.A), Water Damage Insurance (W.A/W.P.A) and All Risks (A.R.), etc.; the latter is subdivided into general additional insurance and special additional insurance. .

Basic insurance coverage

• Ping An Insurance: Covers total loss or constructive total loss of the entire batch of goods caused by natural disasters, loss of goods caused by accidents, etc.
• Water damage insurance: In addition to all the liabilities of Ping An Insurance, some losses caused by natural disasters are also added.
• All risks: Not only covers all the responsibilities of the first two, but also additionally bears the losses caused by general external reasons during transportation.

Introduction to additional risks

Additional insurance is an extension and supplement to the basic insurance and cannot be insured separately. The general additional insurance includes but is not limited to theft, non-delivery insurance (T.P.N.D), fresh water rain insurance, short quantity insurance, etc. There are 11 types of general additional insurance; the special additional insurance covers non-delivery insurance, import tariff insurance, deck insurance, etc. .

Insurance amount and rate calculation

The insured amount is usually the CIF price plus a 10% markup, and the insurance premium can be calculated by the following formula:

• Insured amount = CIF value × (1 + markup rate)
• CIF = CFR /[1﹣Insurance rate × (1 + markup rate)]

In actual operation, for goods with a small value (such as less than 2,000 US dollars), simplified processing may be adopted, and a uniform fee of about 100 yuan will be charged as insurance premium.

Insurance and compensation in cross-border logistics

Cross-border logistics faces many challenges such as cargo loss, damage and delays. In these cases, insured services become an effective way to mitigate risk. According to the contract, the shipper can obtain corresponding compensation after choosing price insurance and paying the corresponding fees. However, it should be noted that the insurance premium is usually calculated based on the declared value of the goods, and the actual compensation amount will not exceed the declared value.

In addition, for uninsured express shipments, express companies usually limit the compensation amount to 3 to 5 times the freight according to the format clauses on the waybill, and set a maximum limit. This means sellers who ship over a long period of time should familiarize themselves with these details to protect their own rights. At the same time, in the field of cross-border e-commerce, insurance products specifically targeted at this industry have emerged in recent years, aiming to provide more protection for small transactions.