What is FOB?
FOB (Free On Board), also known as "Free on Board", is one of the commonly used trade terms in international trade. In a transaction conducted at the FOB price, the buyer is responsible for sending a ship to transport the goods, and the seller shall load the goods onto the ship designated by the buyer at the port of shipment and within the specified period specified in the contract, and notify the buyer in a timely manner. When the goods are loaded onto the designated ship at the port of shipment, the risk is transferred from the seller to the buyer.
How to calculate FOB?
(1) For factories:
FOB={{1-[tax refund rate/(1+VAT rate)]}*RMB price including tax}/spot purchase price
Formula analysis: FOB = (RMB tax-inclusive price - tax refund income) / exchange rate
Among them: Tax refund income = RMB tax-inclusive price × [tax refund rate/(1+VAT rate)]
Then: FOB = {RMB price including tax - {RMB price including tax × [tax refund rate / (1 + value-added tax rate)]}} / exchange rate
FOB = {{1-[tax refund rate/(1+VAT rate)]}×RMB price including tax}/exchange rate
(2) For foreign trade companies:
FOB={{{1-[tax refund rate/(1+VAT rate)]}×RMB purchase price including tax}+profit}/spot purchase price
Or: FOB = {{1-[tax refund rate/(1+VAT rate)]}×RMB purchase price including tax}/[spot purchase price×(1+profit margin)]
This is the end of the introduction to FOB in this issue. If you want to get more information about FOB, please pay attention and we will continue to answer your questions~
