Exporting software to China, very confused, please help?

[Scoombs]

Hello all.

New to this forum but hope to contribute more in the future.

I am wondering if anyone has any experience of exporting software to China?
We are a small UK business that creates specialist software, a customer in the US will be using our software to share information with their colleagues in China. The deal will be split between a sale to the US and a sale direct to China, I have been asked to provide the quotes and invoices in local currency.

From what I have understood there is zero UK VAT to apply on this but I have read that there could be export/Import tax that applies. I have spoken wth the UK/China trade body and they didnt know the answer, which was a worry. the UK Trade and investment will take upto 15 days to respond which could prevent the deal from even progressing.

Anyone have any experience or where we could go to try and get the information we need?

Thanks and regards,

Scoombs

 

[GraemeL]

Not sure, but the reference could be to Duty/Tariff.

You can look here (There are some references to specific product types)

http://customs.hmrc.gov.uk/channels...ype=document&resetCT=true&id=HMCE_PROD_008051

or here

http://customs.hmrc.gov.uk/channels...yType=document&resetCT=true&id=HMCE_CL_001196


G

 

[Scoombs]

Thanks Graeme,

I will read those in detail. There doesnt seem to be anything specific to say that there is additional tax to pay, so I might assume that there probably isnt and accept my ignorance if i'm wrong.

 

[IXP1]

Are you aware of Duties and Taxes ...?

This could be what they're referring to.

 

[Scoombs]

IXP1.

Exporting is an aspect that I am very nervous about, I just don't yet understand the basics, I will enroll on a course or have a consultant advise but that won't help me with this specific deal.
We are a tiny company but do sell to the US and other EU (and non EU) countries, the information is readily available for those and as long as I put specific references on invoices such as their MOMS or MwST numbers then tax and VAT isnt applicable to be charged.
There is info that relates to the physical shipping of exported goods to China but nothing that is specific about software which of course doesnt have actual shipping.

I've got some learning to do it seems.

Regards,
Scoombs.

 

[IXP1]

Hi Scoombs,

How are you sending your Software? I presume there's no physical presence?

 

[Scoombs]

We will invoice them in local currency (CNY = £15k ish) then provide them with a link to download the software and the license to unlock it.

It's hastle and normally I wouldnt really want to do iit this way because I am so unsure, but this is just an element of a larger deal that involves another company in the US.

 

[Suhwakim]

I agree with Gramel.
The tax would be tariff when you export or import something.

 

[Scoombs]

Thanks Suhwakim,

I'm not sure I completely understand, do you mean that the tax is based on a tariff rather than a percentage? or that it's based upon the type of product being exported?

 

[Macaodha2009]

FYI: There will be no tax if the buyer agrees to buy your software without Formal Customs clearance. If they insist to make formal Customs clearance for the Software Discs, then it will be 13% import tax (not for sales purpose).

 

[Scoombs]

Thanks for the answer, I appreciate the help.