So as I stated in my earlier post on this topic we were about to pay ~ $10-15k more in VAT until we stopped the process. At the point the shipper and importer told us we could adjust the invoices to accurately reflect the shippable items and avoid unnecessary VAT. However, there was one little piece of information they left out...1 of the 2 invoices had already been given to Chinese customs so we couldn't change it without going through some serious red tape.
So without being told this additional tidbit i worked with the vendor that is implementing this system (also responsible for procuring and shipping it) to develop an updated set of invoices. The vendor submitted the updated invoices to the shipper and importer thinking all was good and this 9 week shipping ordeal would soon be over. But wait....remember the bit of information I told you they left out. Well we get a little nasty gram note back from them stating: "The invoice is all wrong and we can't use it! The weights make sense compared to the air bill; items are missing from the invoice (my thought - uh wasn't that the point of adjusting the invoice?); Country of Origin is incorrect for one of the devices. When you get this all corrected in a new invoice please send it to us." At this point they still hadn't bothered to tell us they had submitted one of the invoices to customs already. When we try to get clarification via email they didn't offer assistance and attempts to call them late in the evening Friday (their time) was thourthed. So now I wait until Sunday night (my time) to call them and I'm finally able to spend 45 mins with the importer (would have taken 15 mins if we both spoke the same language natively) to drag out of him that one of the invoices had already been submitted and more detail about why he was concerned about the weights on the invoice compared to the air bill. Armed with this information I send an email follow-up to the importer to ensure I understood everything (remember the language barrier thingy I mentioned) and forwarded the same information to the vendor in order to ensure the latest invoices would be correct and accepted by the shipper\importer and customs. Late Monday evening (my time) we get confirmation that the invoices look good and will be submitted to customs for processing. Now we sit and wait yet again. (hopefully for only 3 days)
Things to prepare and do if your going to ship electronics to China:
- prepare invoices that only show the items that are included in the shipment
- ensure the invoice (packing slip) includes the following: name of item; catalog #; vendor; description; qty; net weight; gross weight; unit & total price; country of origin and serial numbers
- ensure that you have CCC certificates (http://www.ccc-us.com/)for each item. if the item is telephony equipment you also need to have NAL (http://ul-asia.com/cma/Network_Access_License/Overview.html) certificates
- ensure total weight on invoice is comparable to weight on the air way bill (or other shipping document)
- if you aren't licensed in China to import goods, establish a relationship with an importer in China prior to shipping the goods and ensure they have all the required information (will likely charge 1 to 2% of shipment value to provide this service)
- be prepared to pay VAT (~17% of value but changes based on country of origin). if your a foreign corporation doing business in China you can apply for a process that allows you to avoid VAT up to a defined $$ amount per year but this should be initiated prior to shipping because as i understand, it is time consuming
- be sure to include a penalty or out clause in your contract with the vendor to ensure they have skin in the game. this should ensure they do everything possible to push the shipment through in a timely manner.
And if you've built a project plan, make sure you use your most conservative duration for the shipping portion. our vendor estimated 2 weeks and we are currently 9 weeks into this 2 week task.
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