Dual Agency Audit Harmonization Procedures for Cross Border Related Party Customs Valuations
Cross-border related-party imports require locking transfer pricing unit formulas into contracts prior to export to align customs value and tax audits.
Customs Decree 213
Meaning
Administrative regulation issued by the General Administration of Customs regarding the supervision of processed trade and bonded goods. Customs decree 213 provides the legal framework for how factories manage imported raw materials that are destined for re export. It establishes the requirements for the e-manual or e-account system used to track inventory balances.
The regulation applies to all enterprises involved in processing with imported materials within the mainland territory. It defines the point at which tax liability arises if goods are diverted to the domestic market. Regional variations in enforcement exist depending on the specific customs district handling the bonded account.
Operational Compliance
Management of the processing trade handbook is the primary task for a factory under this rule. The customs decree 213 dictates that any discrepancy between physical stock and digital records can trigger an audit. Materials must be used within the approved scope of the processing trade contract.
Scraps or defective products generated during production require specific declarations to maintain tax exemptions.
Audit Power
Officials from the local customs house possess the right to inspect facilities and financial records to verify compliance. This customs decree 213 enables the authority to suspend the processing trade status of a company found in violation of reporting standards. Audits typically look for unauthorized lending of bonded materials to other factories.
Penalties for non compliance include fines based on the value of the goods and the amount of evaded tax.
Regulatory Boundary
Provisions in the text do not apply to goods imported for general trade where duties are paid at the port of entry. While the customs decree 213 governs the lifecycle of bonded materials, it stops at the border of special economic zones which may have their own distinct sub-regulations. The oversight ends once the finished products are exported and the handbook is balanced and closed.