Exporting & Importing Goods/Exporting "Test/Demo" Unit to China, how to avoid Duties & Taxes Legally
We are a USA small business that designs and manufactures a scientific tool (Sch. B#9031900000 and EAR99, NLR). We found a new potential customer in China. They want to test our product before they potentially buy it from us. My question is how do we export our scientific tool into China without our customer having to pay duties and taxes upon entry?
Our Chinese customer is saying that we should export it at zero dollars as a "test" unit used for demonstration and exhibition only. The problem we have with that is the unit is a brand new fully functional system worth $7,000. I don't feel like changing the value would be right. Also there is a chance the customer will purchase the unit after testing, can duties and taxes be paid at that time? Like a sort of duty deferral? If so how does one logistically make that happen?
This is a very specific question. I really do not know the answer to this. However, you may want to check with the Chinese Consulate - Trade OFfice, to find out any duties or taxes that the buyer may be liable for. Also, check the type of product, sometimes there are specific treatments for certain prototypes. The US Trade Commission may give you some answers too. There is a list of products and countries that are exempt from duties. You may not want to put zero value when shipping the prototype because of insurance issues. Good luck.