Translation. Region: Russian Federation –
Source: KMZ Cargo – KMZ CARGO –
An important disclaimer is at the bottom of this article.
Thanks to Chinese VAT refunds, legal supplies are showing unexpected profitability – a KVT expert uses a specific case to analyze the "hidden" arithmetic.
Switching to fully legal import schemes from China can provide companies not only with reduced risks but also direct savings exceeding the cost of cargo transportation. A key factor is the ability of the Chinese supplier to reclaim export VAT, which is applied as a discount on the goods. Ivan Smerichinsky, Head of Client Services at KVT, presented this calculation using a specific case study during an industry webinar.
Switching to fully legal import schemes from China can provide companies not only with reduced risks but also direct savings exceeding the cost of cargo transportation. A key factor is the ability of the Chinese supplier to reclaim export VAT, which is applied as a discount on the goods. Ivan Smerichinsky, Head of Client Services at KVT, presented this calculation using a specific case study during an industry webinar.
In the case of the cargo scheme, the delivery rate was set at $3 per kilogram, amounting to $2,000. However, the expert noted hidden costs. "When paying through cargo schemes, very high conversion rates arise—often simply unreasonable. They can mark up the initial exchange rate by up to 5-6%, and sometimes as much as 10%," Smerichinsky noted. Even accounting for the conversion at the inflated rate (the yuan at 11.9 rubles, the dollar at 85 rubles), the final cost of the cargo delivery would be lower than the legal amount—1.4 million rubles. But the analysis did not end there.
Smerichinsky presented an optimized scenario for legal import, where the importer exercises the right to reclaim export VAT. "If we agree with the supplier that they will refund us their entire export VAT, which is 13% in China, as a discount, then the purchase price of the goods will be 87,000 yuan," he explained. This transaction radically changes the financial result. The reduction in the purchase price entails a reduction in the customs value, customs duty, and VAT. As a result, the total cost of official import, taking all expenses into account, will be just over 1.3 million rubles, which is not only lower than the original legal option but also cheaper than the cargo option, Ivan Smerichinsky emphasized.
The expert emphasized that implementing such a scheme in practice is only possible with a well-established long-term relationship with the supplier. "Of course, we're looking at an ideal case where our supplier offered a discount, even covering the full VAT amount, but nonetheless, it's very significant," Smerichinsky commented.
This calculation demonstrates that when switching to white-label schemes, companies should focus not only on the inevitable costs, but also on finding legal tools for financial optimization, one of which is working with the counterparty's export VAT, the expert concluded.
As a reminder, according to the Price Index Center, the cost of shipping a 40-foot container from China to Russia reached a five-year low in 2025. LR
Publication date: 11/07/2025
Please note; this information is raw content obtained directly from the information source. It is an accurate account of what the source claims, and does not necessarily reflect the position of MIL-OSI or its clients.