The receipt and payment of funds under foreign contracted projects involves goods, services, initial income and direct investment. In principle, the contracted projects where there are no people, branches and project offices belong to construction services, and the contracted projects where there are the above entities belong to direct investment. "Project Office" refers to the office set up by residents for operating overseas contracted projects (usually long-term projects), and is responsible for managing projects and financial revenues and expenditures of projects. All transactions under foreign contracted projects are declared as follows:
1. Declares that domestic contractors have not set up legal persons, branches, project offices and other entities in the project location to undertake overseas projects, and have not entrusted the projects to other institutions.
Declaration of project equipment and materials: First, the expenditure of domestic contractors purchasing equipment and materials from third countries/project locations for overseas project construction is actually overseas construction investment, which is declared under "2240 10- overseas construction". Second, domestic contractors purchase equipment and materials for export in China, and receive remittance of equipment and materials from overseas project contractors, and declare them under "12 1- goods trade included in customs statistics" according to the customs declaration or filing, and indicate the words "overseas units without contracted project export" in the transaction postscript.
Declaration of overseas project income: the project income obtained by domestic contractors from overseas contractors should be declared under "2240 10- overseas construction".
2. Declaration of overseas contracted projects where domestic contractors set up legal persons, branches and project offices in the project location and did not entrust the projects to other institutions.
(1) If the domestic parent company has newly established or contracted subsidiaries, branches and other overseas direct investment entities, it shall sign a project contract with overseas contractors.
Declaration of project equipment and materials: First, the domestic parent company purchases equipment and materials from a third country/project location for the use of overseas direct investors in the project location, and the remitted funds should be reported under the item "621KLOC-0/-Remittance of funds of newly established overseas subsidiaries". Second, the materials purchased by the domestic parent company in China are exported to the direct investment entity where the project is located, and the overseas direct investment entity pays the domestic parent company, and declares it under "12 1- goods trade included in customs statistics" according to the customs declaration or filing method, and indicates the words "setting up overseas entities to contract the export of the project" in the transaction postscript.
Declaration of project income obtained from overseas: first, the project income obtained by the domestic parent company from overseas contractors is declared as the recovery of foreign direct investment within the original investment amount under the project of "62101-Liquidation of overseas subsidiaries terminated". Second, the part exceeding the original investment amount shall be reported as direct investment income under the item "32201-dividends, bonuses or profits obtained from overseas subsidiaries".
In addition, if a domestic subsidiary (branch) of a domestic parent company purchases equipment and materials for an overseas subsidiary (branch) in advance, if it purchases from a third country/project location, the expenditure will be declared under "62302 1- Providing loans and other creditor's rights to overseas affiliated enterprises", and if it purchases from China, it will be declared or filed in "1268" according to the customs. Income received by domestic subsidiaries (branches) from overseas projects is reported under "62302 1- Recovery of loans and other transactions to overseas affiliated enterprises".
(2) Direct investors such as newly established or existing subsidiaries or branches of domestic parent companies abroad shall sign project contracts with overseas employers.
Declaration of project equipment and materials: First, the domestic parent company purchases equipment and materials from a third country/project location for overseas subsidiaries or branches, and the remitted funds should be declared under the item "62 102 1- Loans and other transactions to overseas subsidiaries". Second, the domestic parent company purchases materials for overseas subsidiaries or branches in China and exports them to the direct investment subject where the project is located. If an overseas direct investment entity pays to a domestic parent company, it shall declare it under "12 1- trade in goods included in customs statistics" according to the customs declaration or filing method, and the words "export of contracted projects by overseas entities" shall be indicated in the transaction postscript.
Project income of domestic parent company from overseas: all of them are reported under "62 102 1- Recovering loans and other transactions to overseas subsidiaries".
(3) Domestic contractors set up project offices and other unincorporated entities overseas.
Declaration of project equipment and materials: First, domestic contractors purchase equipment and materials from a third country/project location for use by entities outside the project location, and the remitted funds are declared under "62 10 16- Remittance of unincorporated investment funds". Second, domestic contractors should declare under "12 1- trade in goods included in customs statistics" in the way of customs declaration or filing when exporting domestically purchased materials to the unit where the project is located, and indicate the words "setting up a project office and other unincorporated units to contract the export of projects" in the transaction postscript.
Declaration of overseas project income: First, if the project income obtained by domestic contractors from overseas contractors is within the original investment amount, it will be regarded as withdrawal of foreign direct investment, and it will be declared under "62 10 16- withdrawal of unincorporated investment funds". Second, the part exceeding the original investment amount shall be reported as direct investment income under the item "32201-dividends, bonuses or profits obtained from overseas subsidiaries".
3. Domestic contractors sign contracts with overseas contractors and entrust overseas companies (including subsidiaries/branches established overseas by domestic companies) to declare specific contracted projects through entrustment contracts.
Such transactions are regarded as contracting engineering outsourcing services. The project funds paid by domestic companies to overseas engineering companies and the project funds received by domestic companies from overseas contractors are declared under "2240 10- overseas construction".