Import RepresentationFour golden rules of commission design

In the field of international equipment procurement, agent commissions typically account for 3-15% of the goods value. The latest data from the General Administration of Customs in 2025 shows that trade disputes caused by improper commission clause design have increased by 27% year-on-year. This article combines the latest revised Model Agency Contract Clauses by the International Trade Commission to dissect the core elements of commission negotiations.

Commission structure types and applicable scenarios

The current four mainstream commission models show distinct regional characteristics:

• Fixed percentage system: Mainstream in the North American market, suitable for standardized equipment
  • Advantages: Clear financial budgeting
  • Risks: May result in insufficient incentives
• Tiered commission: Preferred by EU enterprises, charged in segments based on purchase volume
  • Typical case: German machine tool imports with a 40% commission increase for exceeding target quantities
• Cost-plus pricing system: Commonly used in emerging markets, based on logistics clearance costs
• Hybrid Model: Mainstream trend in 2025, combining base commission + performance bonus

Three key clauses in commission negotiations

A certain medicalequipment. For example, Indonesia has the SNI certification, Thailand has the TISI certification, and the Philippines has the BPS certification. It is necessary to confirm in advance the equipment voltage (such as 380V/50Hz in Thailand), the compatibility of the CE certification, and the proof of environmentally friendly materials.Practical cases from businesses show that well-designed clauses can reduce agency costs by 21%:

• Calculation basis: Must clarify whether it includes tariffs and transportation surcharges
  • 2025 customs new policy: VAT deduction rules affect post-tax base calculations
• Payment terms: It is recommended to set three payment milestones
  • 30% payment upon contract signing
  • 50% payment upon equipment arrival at port
  • 20% payment after warranty period expires
• Exclusion clauses: Special agreement required for commission calculation methods regarding sample procurement and exhibition machine handling

Three pitfalls in cross-border tax processing

According to the International Tax Agreement effective in 2025, different payment methods result in significant tax burden differences:

• Domestic payment: Requires withholding 6% VAT + 10% withholding tax
• Offshore settlement: Can avoid VAT but faces transfer pricing review risks
• Optimal solution: Split service items to convert 40-60% commission into deductible costs

Practical suggestions for legal risk prevention

An engineering machinery import dispute case revealed: Failure to specify dispute resolution clauses resulted in additional losses of 3 million yuan. Essential clauses include:

• Clearly specify application of the United Nations Convention on Contracts for the International Sale of Goods
• Designate Singapore International Arbitration Centre as dispute resolution institution
• Include performance-based clauses with minimum annual purchase volume

2025 agency model innovation cases

A semiconductor equipment importer adopts a basic commission + market development bonus model, guaranteeing a 3% base rate while:

• Successfully developed three new clients and received an additional 7% bonus
• Reduced equipment installation cycle by 15 days and received 1.5% efficiency bonus
• Maintained annual comprehensive commission rate at industry-low 8.2%