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Matters Needing Attention In Commission Payment

2008/10/29 9:51:00 41920

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In international trade, we often encounter the situation of paying commission to foreign countries. For example, when we entrust foreign sales agents or sell new products directly through intermediaries or develop new markets, we need to pay commissions to agents or middlemen.

The following issues related to the payment of commission are put forward for reference.

　　一、計算傭金的基數問題

Taking FOB and CIF prices as an example, in the case of CIF contracts, a smart salesperson should use FOB price as the base to calculate the Commission of the other party.

The reason is that according to the provisions of INCOTERMS2000, the risk points of the seller and the buyer in the CIF trade terms are divided into the shipboard side of the loading port, so the seller's subsequent pportation and insurance is acting for the benefit of the buyer, that is, the cost of pportation and insurance in the CIF price is not the seller's interest and is paid separately to the shipping company and the insurance company for the benefit of the buyer. Therefore, the seller should not draw commission to the buyer on the part of the pportation and insurance premium. Instead of deducting the pportation and insurance cost from the CIF price, the base price of the Commission should be calculated by the FOB price of the goods.

　　二、計算傭金的方法問題

It is clear to all that the formula for calculating Commission in all textbooks on international trade is:

Inclusive price = net price + commission

Commission = commission rate X Commission

Net price = commission price x (1 - commission rate)

According to the above formula, the calculation method of the sum of money can evolve into:

Commission = (net + commission) x commission rate

Net price x commission rate + commission x commission rate

The question now is that this formula shows that the Commission itself is also taken out of commission.

In fact, there is another very similar situation in the operation of foreign trade enterprises, that is, the calculation of the VAT invoice and the amount of tax refund:

Invoice amount (including tax value) = principal + tax

Tax = principal x value added tax rate (17%)

Principal = invoice amount / (1 + 17%)

Therefore, the formula of the State Administration of Taxation in calculating the amount of tax refund to export enterprises is:

Tax refund = principal x rebate rate

= invoice amount / (1 + 17%) x refund rate

Instead of directly using the "invoice amount x refund tax rate", the reason is that the invoice amount is inclusive of tax price, the tax itself can not give tax rebates.

In the same way, the author thinks that it is more appropriate to calculate the Commission and commission with the following formula:

Inclusive price = net price + commission

Commission = net price x commission rate

Inclusive rate = net price x (1 + commission rate)

If the commission price is known, the calculation method of the Commission is the formula for calculating the Commission of foreign trade commission paid to foreign Commission Merchant:

Commission = commission price / (1 + commission rate) x commission rate

For example, in the actual paction process, we have quoted a commission price of 3% for a product of 10000 US dollars.

Payable amount = $10000 x 3% = $300

If the second formulas are calculated, they are:

Payable amount = $10000 / (1 + 3%) x 3% = $291.26

By comparison, the former accounts for 8.74 US dollars more than the latter. The reason is that the Commission itself is also taken out of commission according to the former method.

The author encountered this kind of situation in foreign trade work. A India importer urged the Commission to pay the bill. The Commission on the bill was obtained by multiplying the total value of the goods (including the commission price) by the commission rate. When I explained to the commission that the Commission itself had to pay the Commission was unreasonable, the India businessman finally accepted my explanation. For this reason, we paid the Commission of $more than 4000 for "less".

Therefore, I think the latter method is more scientific, reasonable and easy to understand and apply.

　　三、支付傭金的時間問題

Our foreign trade enterprise must insist on paying commission to middlemen when the sales contract is fulfilled.

The purpose of adhering to this approach is to integrate the interests of middlemen and the performance of the contract, so that the intermediate chamber of commerce can make the parties better perform the contract so as to get the part of the interest he wants.

Especially when there are misunderstanding and dispute in the initial paction between the buyers and sellers, the intermediaries' communication and mediation are particularly important.

Suppose the seller pays the Commission to the middleman before he has received all the money from the buyer safely. When the contract performance is out of order, the middlemen will be lazy because of the lack of corresponding incentives, so they will not actively promote the smooth operation of the paction.