In the age of technology 4.0 Currently, Trade is no longer limited to one country, a specific location but also extends to two or more locations around the world. International transportation is one of the important ways, affects the exchange of goods between places on earth.

What is international transportation?? What tax rates apply to international transport?? Follow the following content with Cuong Quoc Logistics.

What is international transportation??

International transportation (International Transport) is a form of transporting goods between two or more countries, That is, the starting and ending points of the transportation process are located in other countries.

Transporting goods in international transport transcends the boundaries of one country. The process of international freight transportation is conducted through the professional activities of specialized shipping organizations. International transportation can be done by many different methods, or combined by more than one of those methods.

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Effects of international transportation

International transport promotes the development of production and circulation of goods

Transport capacity when circulating between countries is one of the factors affecting the volume of goods between those countries.

Normally, The volume of goods flowing between countries will be inversely proportional to the transport distance. Transportation distance is also known as economic distance, That is, a certain amount of labor must be spent in the process of transporting goods between transport points. For consignors, That is the shipping fee.

When the volume of goods exchanged on the market is larger, the cheaper the shipping fee will be. The main reason is that shipping costs account for a large proportion of the price of goods.

As science and technology increasingly progresses, labor productivity increases, lower product prices, transportation costs are reduced, will make an important contribution to rapidly increasing the volume of goods circulating in international trade.

VTQT changes the commodity structure and market structure

Before, International trade only focuses on finished and semi-finished products. When modern tools were born, has a structure that is convenient for transportation and allows reducing transportation costs while allowing for the expansion of product categories..

The change in product structure is most clearly shown through the expansion of trade in liquid products. When transportation was not yet developed, fares are still high, Consumption markets will be concentrated near production sites. Nowadays, as transportation developed, The trading market has had conditions to expand more.

International trade protects or worsens the international balance of payments

Transport development affects the increase in foreign exchange earnings through transport exports. Besides, They also save foreign exchange costs by preventing imports of transport products.

Opposite, If international transport cannot meet the needs of transporting goods in international trade, a country is forced to spend a large amount of foreign currency to import transport products.. That means hiring foreign ships to transport or buy goods CIF conditions and sold by FOB.

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Some forms of international transport

Depending on size, type of goods as well as quantity of each batch of goods, Businesses can choose the appropriate form of international transportation. Two of the forms of transportation chosen by many businesses are international transportation by air and international transportation by sea..

International transport by air

International transportation by air ensures that your goods are always delivered in the fastest time.

However, This form limits the type of goods. Not every shipment of goods can be transported by air.

International transport by sea

International transportation by sea has an outstanding advantage: it is suitable for all types of goods, no matter where or in any region of the world.

Not only that, This is also one of the services with a direct route. All routes have close connections with large and small ports around the world, Or rather, all the places it has ever been to.

Tax rates apply to international transportation

The tax rate applicable to international shipping is one of the mandatory costs that businesses must pay to freight transport service units..

As described in the above section, International transport usually goes through 2 routes: air and sea. Tax rates applied to international transportation will occur in 2 cases:

a. Case 1: When businesses use the services of Vietnamese airlines and domestic shipping lines, The invoice will include the following 2 contents:

• International shipping fees have a tax rate of 0%
• Local fees at shipping location (in Vietnam) has a tax rate of 10%

b. Case 2: When businesses use the services of foreign airlines and shipping companies, The invoice will include the following 2 contents:

• International shipping fees have a tax rate of 0%
• Local fees at shipping location (abroad) There is a Tax rate written xxx => In this section, the tax amount will be the contractor tax calculated by the supplier on the transferred invoice, The buyer is only responsible for paying the correct and full amount on the invoice, normal tax will be deducted.

c. Case 3: When a business uses the services of an airline/shipping company, Loading and unloading fees, Pack it up and buy it from a company that specializes in providing services (forwarder company) in Vietnam:

• International shipping fees have a tax rate of 0%: Airlines/shipping lines export to forwarder companies. Afterward, forwarder company exports to customers.
• Local fees at shipping location (in Vietnam): Tax rate 10%: The company specializes in providing services at export ports or airports.

=> Conclude: Businesses purchase input services from supplier partners, When recording tax rates, the provision of output services to customers of the same type of service is also based on recording tax rates like that..

To apply 0% tax rate during international transportation, Enterprises must meet the following conditions:

• There is a passenger transportation contract, luggage, carriage of goods between the carrier and the charterer on an international route from Vietnam to a foreign country or from a foreign country to Vietnam or both a departure point and a destination abroad in forms consistent with the provisions of law..
• Having proof of payment via bank or other forms of payment is considered payment via bank.

International freight shipping process

Step 1: Receive goods from sender, At this time, the shipping unit will dispatch distributors and vehicles to the sender's place to receive the goods.

Step 2: The sender's goods will be taken to a specialized warehouse for consolidation with other units' products.

Next, carry out import and export procedures for goods with customs authorities. This is also a quite important step because they can allow your goods to be retained for any reason if they are among the banned products..

Step 3: Once approved with the customs department, The goods will be transported to the port, airport,… Here they will directly pack the goods for transportation to the recipient abroad.

Step 4: Transport goods to customs warehouse in the destination country. Usually this step will go quite smoothly, But you may also encounter problems if the product data is different from the shipped product.

Step 5: International shipping and delivery will be much more complicated than domestic shipping. There will be a lot of costs and time incurred during the process of importing goods and transporting them. Therefore, before you ship goods internationally, you need to prepare and check carefully for unexpected incidents that may occur..

>>> See more: What are CIF and FOB?? Role of buyer and seller in CIF and FOB contracts

Conclude

Above is the concept of international transportation and content related to international transportation. If you have any questions, Please contact us for detailed answers.

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Cuong Quoc Freight Forwarding Company Limited

Office: 7th floor, Parami Building, 140 Bach Dang, Tan Son Hoa Ward, Ho Chi Minh City

Hotline: 0972 66 71 66

Email: info@cql.com.vn

Website: https://cql.com.vn/