Important Notice Regarding Adjustments to China's Export Policies

Dear Valued Customer,

This announcement follows recent policy changes introduced by the State Taxation Administration of China concerning export duty declarations. These changes involve significant adjustments to the reporting procedures for cross-border transactions. Our company has conducted thorough research into these policies and offers two alternative approaches for your consideration to ensure compliance with your export operations. We also seek your feedback on these proposals.

I. Policy Background and Objectives

In July 2025, the State Taxation Administration issued Announcement No. 17 of 2025 concerning optimising matters related to corporate income tax advance payment declarations. This updated the corporate income tax advance payment declaration form and clarified relevant adjustments. The announcement will take effect on 1 October 2025.

This announcement aims to standardise the corporate income tax advance payment declaration process and strengthen oversight of agency business income recognition and tax-paying entities. From 1 October 2025, all export agency enterprises (including market procurement and comprehensive foreign trade service providers) must, when making quarterly advance corporate income tax payments, submit actual cargo owner information and export amounts concurrently with the advance payment declaration form and relevant supporting documents, in addition to complying with existing reporting requirements.

II. Response Options

To comply with the policy requirements of the State Taxation Administration of China, we propose two alternative solutions and recommendations for fulfilling orders and conducting export agency services undertaken by our company:

Option One: Utilise your designated supplier as the exporting entity to execute export customs declarations.

Selecting this model requires your confirmation that your supplier possesses lawful and valid declaration entity qualifications, specifically including:

Firstly, the business scope of the business licence must encompass import and export rights.

Second, the supplier must have completed e-commerce registration and import/export consignee qualification registration.

Third, the supplier must have completed tax exemption or tax rebate registration as an import/export consignee.

Fourth, the supplier must maintain a foreign exchange account capable of handling foreign currency settlements.

Fifth, completion of foreign exchange account registration.

Option Two: All procurement activities within China shall be initiated by our affiliated enterprises to your designated supplier.

Our company shall assume full responsibility for procurement matters and designate an export company compliant with Chinese policy requirements as the customs declaration entity. Selecting this model requires your company to prepay procurement funds to the account of our customs declaration entity company, from which we shall settle payments to your supplier to complete the procurement process.

The above two models constitute compliance recommendations. Should the current model persist beyond 1 October 2025, there exists a risk of policy non-compliance. Should the tax authorities subsequently adjust customs declaration procedures (including but not limited to new requirements for customs declaration entities or information provision by goods recipients), we shall promptly notify you. Should you or your suppliers have any queries regarding the above arrangements or supplier qualification requirements, please contact us. We shall assist in liaising with your suppliers to ensure smooth completion of export operations. Official announcement reference for the State Taxation Administration of China's ‘Announcement on Optimising Matters Related to Corporate Income Tax Advance Payment Declaration’ (No. 17 of 2025) (Central People's Government of the People's Republic of China website):

https://www.gov.cn/zhengce/zhengceku/202507/content_7032925.htm

To better serve your shipping requirements, please complete the form via the link: https://ucenter.chinadivision.com/collection/tax-opinions, providing your Member ID and selecting your preferred business model. Should you have any suggestions or queries, kindly note these in the remarks section.

This business model adjustment shall take effect from 1 October 2025 and shall apply to all subsequent operations. Should you require further clarification, please contact our official customer service team (available during Beijing working hours from 9:00 to 18:30): Visit https://www.chinadivision.com and click the customer service icon at the bottom right of the page to reach us.

The following two client case studies from our collaborative projects are provided for your reference:

Client Case Study One

Client Background: Canadian-based client specialising in apparel SKU products.

Collaboration Model: The client's goods supplier pre-emptively fulfilled all export declaration requirements—including necessary qualifications and settlement account applications—in accordance with our compliance guidelines. This successfully established their status as an export customs declaration entity, with our firm providing ongoing export customs declaration agency services.

Application Outcomes: The client's daily freight supply chain now operates smoothly. Furthermore, as most competitors within the industry have yet to resolve export customs declaration issues under the new policy, this client has seized a market advantage. Consequently, their business order volume has tripled, and their market presence is expanding healthily and rapidly.

Photographs of the client's goods at the site are as follows:

Client Case Study Two

Client Background: US-based client specialising in nearly 100 trending SKUs across cosmetics, electronics, textiles and other categories.

Collaboration Model: The client selected direct transactions between our affiliated enterprise and their suppliers. As our entity possesses all export customs declaration prerequisites, it serves as the compliant customs declarant, providing core assurance for freight supply.

Application Outcomes: The client's freight supply chain currently operates with stable reliability. Feedback indicates competitors have yet to resolve export customs declaration issues under the new policy framework. With our service support, the client anticipates its supply chain stability will deliver a significant competitive edge from mid-September onwards, projecting a 5-10-fold increase in order volume. The client has explicitly directed our subsidiary to increase procurement volumes from suppliers and pre-stock inventory to seize market opportunities.

Photographic evidence of the client's goods is provided below:

The new export customs declaration policy presents a significant development opportunity for every client. Among our collaborating customers, Option Two has emerged as the preferred choice for the majority. Our company steadfastly upholds the cultural ethos of ‘accompanying clients in their growth, assisting them in overcoming challenges, and helping them seize every developmental opportunity.’ We encourage you to capitalise on this occasion by promptly confirming the most suitable solution. This will ensure stable supply chain continuity for your goods and enable you to confidently seize market opportunities.