A document transaction refers to the use of a documentary document to represent the goods. The transaction is targeted at this set of documents. Whoever receives this set of documents is the owner of the goods. As a result, the goods are not moved as much as possible, and the documents are arbitrarily traded and changed. The holder of the document decides when and how to finally process the goods. This set of documents usually includes several core files: 
1. Bill of Lading (Billfloading Bill of Lading, abbreviated as B/L)
2. Invoice
Different from the concept of ordinary invoices, the “invoice†in foreign trade refers to a signed document that is made by the manufacturer and lists the name, quantity, and price of the goods.
3, Packing List (PackingList)
A self-made signature document listing the volume and weight of the shipment.
4. Other documents that describe the condition of the goods, such as certificates of inspection to prove the quality of the goods, certificates of origin of the certificate of origin, etc.
Among the full set of documents, the bill of lading is the most important because it is the proof of ownership of the goods—a proof of property rights that have internationally recognized legal effects. Invoices and packing lists can be controlled by themselves. Other inspection certificates, certificate of origin, etc. are issued by the corresponding state agencies such as the Import and Export Commodity Inspection and Quarantine Bureau or other organizations recognized by both parties, such as private inspection companies and freight companies, based on the characteristics of the goods and the requirements of the buyers.
In a sense, foreign trade operators are not dealing with piles of goods, but a stack of pieces of paper. Therefore, it is not surprising that a foreign salesman completes a transaction and never sees the appearance of goods from beginning to end. He only needs to handle the stack of paper carefully. We can easily imagine that because trade is mostly based on documents rather than physical transactions, even if the goods themselves are perfect and the documents are flawed—such as data errors, lack of a relevant supporting document, etc.— It is very likely that the transaction will fail. In turn, even if there are problems with the goods and the documents are complete, they can still be traded smoothly. Of course, this brings some risks, such as forged documents for fraud. However, fraud itself is a criminal act in all countries of the world and there are corresponding measures for investigation.
In short, the role of documents in foreign trade is decisive. Establishing the concept that “Foreign trade is actually trading a set of documents†is necessary for understanding many special and professional operations in international trade.
Market competition is fierce. In many cases, prices have become the only factor in the transaction. We often see foreign traders exporting goods at lower prices than domestic sales. Are they crazy? Do not. Even if it is sold at a price lower than the purchase price, foreign trade still has profits. This is the second most important secret of foreign trade: the tax rebate system.
Key Content of Foreign Trade II: Tax Refund System
Export tax rebate is an important concept in foreign trade, and it is also the main source of profit in current foreign trade business. For ease of management, the state assumes that all products are domestically circulated and consumed. Therefore, VAT is generally levied and the tax rate ranges from 6% to 17% of the selling price. Under normal circumstances, the prices before domestic purchase or export are all tax-inclusive prices, that is, they have already paid the value-added tax. If the product is used for export, this part of the tax should not be levied. The already collected tax can be returned to the exporter in part or in full according to the procedure.
If you purchase a batch of color TV sets from a domestic factory, the price is taxable price of 1170 yuan, of which 1,000 yuan is the net price and 170 yuan is the value-added tax. According to the regulations of the country, the export tax rebate rate for color TV products is 17%. In other words, after the color TV is exported, the tax bureau will refund 170 yuan to exporters.
In this way, even if exporters export at a flat price of 1,170 yuan, they can still get a tax refund of 170 yuan as profit income. Under this circumstance, if the exporter takes out part of the 170 yuan for price adjustment due to competition, even if it is sold at a price lower than the purchase price of 1170 yuan, it will still be profitable.
Foreign trade transactions usually have relatively high value, and the corresponding tax refunds are also considerable. Of course, the state also rigorously manages the tax rebates and closely integrates with foreign exchange management. Before exporting, it is necessary to obtain the “Export Tax Relief Verification Form†from the Department of Foreign Exchange Administration and declare the total amount of export. The verification slip must also be stamped by the customs to confirm that the goods have indeed been exported. After receiving the payment from the foreign buyer, the bank receipt, along with the verification form, will be applied for verification and write-off with the foreign exchange administration. The VAT invoice will then be issued to the Inland Revenue Department to handle the tax refund and receive the tax refund.
Therefore, the source of foreign trade profits comes from export rebates in the national export tax rebate system. This is one of the most significant features of foreign trade, and it is also closely related to the daily operations of most foreign trade clerk.
Key Content of Foreign Trade III: Letter of Credit Trading
In international trade, buyers and sellers are far apart from each other, and there is a long period of time between the preparations for handover of goods with various backgrounds and payment of payment. Therefore, commercial credit has become a big problem.
As an exporter, I am worried that after the bulk cargo has been prepared, what will happen to the buyer? What should I do if the goods are shipped to foreign countries? Or how to do if you want to give up money? Naturally, it is hoped that the buyer can pay the purchase price first, and then guarantee delivery and delivery. As an importer, what if you are concerned that the exporter cannot deliver on time? What if the quality and quantity of the goods are not qualified? Naturally, it is hoped that the seller will deliver the goods first, and the money will be given after verification.
This contradiction can, of course, be negotiated through the payment of some advances or deposits by the buyer. However, after all, it is not the best policy. Once the buyer’s funds are taken up, what’s really a dispute between the two parties. Both sides are right or wrong and suffer losses. fair. So there is a unique operation mode of foreign trade: the letter of credit. The origin of the letter of credit is based on the characteristics of foreign trade "document transaction".
The so-called letter of credit, popularly speaking, means that the buyer and seller agree in advance on the terms of the transaction, such as the name, quantity, quality standards, price, and delivery time. Then the buyer finds a bank (usually the buyer's bank, or has a certain guarantee) as a "middleman" and submits these transaction conditions to the bank. The bank then issues a document as the basis for the buyer and the seller. The responsibility of the bank as a middleman is to supervise the conduct of transactions. The seller prepares the goods according to the documents and then delivers the full set of documents representing the goods to the bank. After the bank has verified the document, it will directly pay the purchase price. With banks as middlemen, buyers and sellers no longer deal directly with money and goods, but deal with banks separately. Sellers can't get the money if they don't deliver it in time, quality, quantity, and delivery; if the buyer doesn't pay, they can't get the goods. On the contrary, there are banks for insurance, as long as the seller has delivered the goods, they will be able to get the money. In this way, it neither takes up buyer's money nor gives the seller a good credit guarantee. This document to prove the commercial credit of both parties is called a letter of credit.
The most basic of a letter of credit generally has four parties:
1. Importer: Responsible for applying for the opening of a letter of credit to his bank account, called an applicant for a letter of credit.
2. The importer’s bank is responsible for opening the letter of credit and reviewing the documents and making payment. It is called the L/C issuing bank.
3. The exporter is responsible for shipping according to the letter of credit and enjoys the payment of the letter of credit protection, which is called the beneficiary of the letter of credit.
4. The exporter’s bank is responsible for obtaining letters of credit for exporters, handing over the documents and contacting the issuing bank, which is called the advising bank.
In addition, the bank ultimately responsible for the allocation of funds is called the credit reimbursement bank, which is usually the issuing bank; it may also be advanced by another bank and charged a small amount of fees, which is called the letter of credit negotiation bank, which is generally the advising bank.
Letter of credit is the most important and common tool in foreign trade. In order to standardize the use of letters of credit, the International Chamber of Commerce has established a unified standard “UCP500â€, which is the Uniform Provisions for International Documentary Credits, as a basis for use and arbitration.
Through the understanding of the three main points of foreign trade: document trading, tax refund system and letter of credit settlement, we basically grasped the essence of foreign trade. Now we can finally understand the process of a standard export operation case more clearly:
Looking for customers ---- signing contracts - customers open letter of credit - according to the letter of credit stocking - goods for commodity inspection, customs declaration and delivery of goods and transport companies and obtain a bill of lading - according to the letter of credit Full set of documents --- documents are delivered to foreign banks, after the foreign bank audits without errors, the money is transferred to the domestic bank --- according to the receipt certificate of the domestic bank to the Foreign Exchange Administration for verification --- to the Inland Revenue Department for refund - ---End
1. Bill of Lading (Billfloading Bill of Lading, abbreviated as B/L)
2. Invoice
Different from the concept of ordinary invoices, the “invoice†in foreign trade refers to a signed document that is made by the manufacturer and lists the name, quantity, and price of the goods.
3, Packing List (PackingList)
A self-made signature document listing the volume and weight of the shipment.
4. Other documents that describe the condition of the goods, such as certificates of inspection to prove the quality of the goods, certificates of origin of the certificate of origin, etc.
Among the full set of documents, the bill of lading is the most important because it is the proof of ownership of the goods—a proof of property rights that have internationally recognized legal effects. Invoices and packing lists can be controlled by themselves. Other inspection certificates, certificate of origin, etc. are issued by the corresponding state agencies such as the Import and Export Commodity Inspection and Quarantine Bureau or other organizations recognized by both parties, such as private inspection companies and freight companies, based on the characteristics of the goods and the requirements of the buyers.
In a sense, foreign trade operators are not dealing with piles of goods, but a stack of pieces of paper. Therefore, it is not surprising that a foreign salesman completes a transaction and never sees the appearance of goods from beginning to end. He only needs to handle the stack of paper carefully. We can easily imagine that because trade is mostly based on documents rather than physical transactions, even if the goods themselves are perfect and the documents are flawed—such as data errors, lack of a relevant supporting document, etc.— It is very likely that the transaction will fail. In turn, even if there are problems with the goods and the documents are complete, they can still be traded smoothly. Of course, this brings some risks, such as forged documents for fraud. However, fraud itself is a criminal act in all countries of the world and there are corresponding measures for investigation.
In short, the role of documents in foreign trade is decisive. Establishing the concept that “Foreign trade is actually trading a set of documents†is necessary for understanding many special and professional operations in international trade.
Market competition is fierce. In many cases, prices have become the only factor in the transaction. We often see foreign traders exporting goods at lower prices than domestic sales. Are they crazy? Do not. Even if it is sold at a price lower than the purchase price, foreign trade still has profits. This is the second most important secret of foreign trade: the tax rebate system.
Key Content of Foreign Trade II: Tax Refund System
Export tax rebate is an important concept in foreign trade, and it is also the main source of profit in current foreign trade business. For ease of management, the state assumes that all products are domestically circulated and consumed. Therefore, VAT is generally levied and the tax rate ranges from 6% to 17% of the selling price. Under normal circumstances, the prices before domestic purchase or export are all tax-inclusive prices, that is, they have already paid the value-added tax. If the product is used for export, this part of the tax should not be levied. The already collected tax can be returned to the exporter in part or in full according to the procedure.
If you purchase a batch of color TV sets from a domestic factory, the price is taxable price of 1170 yuan, of which 1,000 yuan is the net price and 170 yuan is the value-added tax. According to the regulations of the country, the export tax rebate rate for color TV products is 17%. In other words, after the color TV is exported, the tax bureau will refund 170 yuan to exporters.
In this way, even if exporters export at a flat price of 1,170 yuan, they can still get a tax refund of 170 yuan as profit income. Under this circumstance, if the exporter takes out part of the 170 yuan for price adjustment due to competition, even if it is sold at a price lower than the purchase price of 1170 yuan, it will still be profitable.
Foreign trade transactions usually have relatively high value, and the corresponding tax refunds are also considerable. Of course, the state also rigorously manages the tax rebates and closely integrates with foreign exchange management. Before exporting, it is necessary to obtain the “Export Tax Relief Verification Form†from the Department of Foreign Exchange Administration and declare the total amount of export. The verification slip must also be stamped by the customs to confirm that the goods have indeed been exported. After receiving the payment from the foreign buyer, the bank receipt, along with the verification form, will be applied for verification and write-off with the foreign exchange administration. The VAT invoice will then be issued to the Inland Revenue Department to handle the tax refund and receive the tax refund.
Therefore, the source of foreign trade profits comes from export rebates in the national export tax rebate system. This is one of the most significant features of foreign trade, and it is also closely related to the daily operations of most foreign trade clerk.
Key Content of Foreign Trade III: Letter of Credit Trading
In international trade, buyers and sellers are far apart from each other, and there is a long period of time between the preparations for handover of goods with various backgrounds and payment of payment. Therefore, commercial credit has become a big problem.
As an exporter, I am worried that after the bulk cargo has been prepared, what will happen to the buyer? What should I do if the goods are shipped to foreign countries? Or how to do if you want to give up money? Naturally, it is hoped that the buyer can pay the purchase price first, and then guarantee delivery and delivery. As an importer, what if you are concerned that the exporter cannot deliver on time? What if the quality and quantity of the goods are not qualified? Naturally, it is hoped that the seller will deliver the goods first, and the money will be given after verification.
This contradiction can, of course, be negotiated through the payment of some advances or deposits by the buyer. However, after all, it is not the best policy. Once the buyer’s funds are taken up, what’s really a dispute between the two parties. Both sides are right or wrong and suffer losses. fair. So there is a unique operation mode of foreign trade: the letter of credit. The origin of the letter of credit is based on the characteristics of foreign trade "document transaction".
The so-called letter of credit, popularly speaking, means that the buyer and seller agree in advance on the terms of the transaction, such as the name, quantity, quality standards, price, and delivery time. Then the buyer finds a bank (usually the buyer's bank, or has a certain guarantee) as a "middleman" and submits these transaction conditions to the bank. The bank then issues a document as the basis for the buyer and the seller. The responsibility of the bank as a middleman is to supervise the conduct of transactions. The seller prepares the goods according to the documents and then delivers the full set of documents representing the goods to the bank. After the bank has verified the document, it will directly pay the purchase price. With banks as middlemen, buyers and sellers no longer deal directly with money and goods, but deal with banks separately. Sellers can't get the money if they don't deliver it in time, quality, quantity, and delivery; if the buyer doesn't pay, they can't get the goods. On the contrary, there are banks for insurance, as long as the seller has delivered the goods, they will be able to get the money. In this way, it neither takes up buyer's money nor gives the seller a good credit guarantee. This document to prove the commercial credit of both parties is called a letter of credit.
The most basic of a letter of credit generally has four parties:
1. Importer: Responsible for applying for the opening of a letter of credit to his bank account, called an applicant for a letter of credit.
2. The importer’s bank is responsible for opening the letter of credit and reviewing the documents and making payment. It is called the L/C issuing bank.
3. The exporter is responsible for shipping according to the letter of credit and enjoys the payment of the letter of credit protection, which is called the beneficiary of the letter of credit.
4. The exporter’s bank is responsible for obtaining letters of credit for exporters, handing over the documents and contacting the issuing bank, which is called the advising bank.
In addition, the bank ultimately responsible for the allocation of funds is called the credit reimbursement bank, which is usually the issuing bank; it may also be advanced by another bank and charged a small amount of fees, which is called the letter of credit negotiation bank, which is generally the advising bank.
Letter of credit is the most important and common tool in foreign trade. In order to standardize the use of letters of credit, the International Chamber of Commerce has established a unified standard “UCP500â€, which is the Uniform Provisions for International Documentary Credits, as a basis for use and arbitration.
Through the understanding of the three main points of foreign trade: document trading, tax refund system and letter of credit settlement, we basically grasped the essence of foreign trade. Now we can finally understand the process of a standard export operation case more clearly:
Looking for customers ---- signing contracts - customers open letter of credit - according to the letter of credit stocking - goods for commodity inspection, customs declaration and delivery of goods and transport companies and obtain a bill of lading - according to the letter of credit Full set of documents --- documents are delivered to foreign banks, after the foreign bank audits without errors, the money is transferred to the domestic bank --- according to the receipt certificate of the domestic bank to the Foreign Exchange Administration for verification --- to the Inland Revenue Department for refund - ---End
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