I'm starting an overseas purchase-agency business — should I register as a reseller or a purchase agent?
Reselling — buying inventory directly overseas and holding it before selling — makes the full sale price your revenue, while purchase agency, where you only broker the purchase on the customer's behalf, usually recognizes only the commission as revenue, resulting in a very different tax-burden structure. The correct treatment depends on your contract and settlement structure, so it's important to clearly define your transaction type early and register under the matching business code — we recommend a consultation beforehand to get this right.
Income-Structure Differences by Business Type
Key Deductible Expense Items
Tax Advantages for Purchase Agency & Dropshipping
Purchase agency only needs the commission filed as revenue
If your contract clearly establishes a pure agency structure, you can recognize only the commission — not the full product sale price — as revenue and reduce your tax burden. You'll need to be able to demonstrate the agency relationship through your contract or transaction structure.
If you're doing reverse direct purchase (overseas sales), consider the zero rate
Conversely, if you're structured for reverse direct purchase — selling domestic products to overseas customers — you may qualify as a foreign-exchange-earning service and be eligible to apply the VAT zero rate (0%).
Put your business form in writing
Because your revenue scale and tax structure differ completely depending on whether you're reselling or acting as an agent, it's safest to clearly document the transaction type in your contracts with suppliers and customers.
The Most Common Mistake We See
The most common mistake is operating with an unclear contract structure — not sure whether you're reselling or acting as a purchase agent — and then getting confused about how to file when it's time to record revenue. It's important to clearly define your transaction type from the start and register under the matching business code.