CUSTOMS DUTY PLANNING

Customs duty and customs compliance impacts on businesses in hidden ways from the sourcing, purchasing, terms of trade, the nature and location of manufacturing and processing operations through to the storage and warehousing of goods, market selection, methods of distribution, licence, royalty and transfer pricing agreements all of which impact upon the exposure of a business to customs laws and its liability to customs duties.

Once a business sees the impact, it can take steps to minimise the customs duty liabilities and manage the customs compliance risks.

Customs duty is paid when goods cross international borders and is based on:

THE CLASSIFICATION OF GOODS;

THE CUSTOMS VALUE;

THE PURPOSE OF IMPORTING; AND

ORIGIN.

An initial, high level review can identify potential customs risks and duty savings opportunities. Managed customs risk is time and money saved; customs duty saved goes right to the bottom line as profit and additional margin.

TARIFF CLASSIFICATION

There are approximately 16,000 commodity codes contained in the Tariff and one of the largest causes of non-compliance is the incorrect classification of goods which may result in the under or over payment of duty.  We have the ability to provide single product or full product list classification reviews, applying for rulings where required and carrying out reclaims where the overpayment of duty has occurred.

CUSTOMS VALUE

In most instances customs duty is payable at the point of import based on the transaction value of those goods.  For most importers, this means the price paid or payable as indicated on the commercial invoice from the supplier.  However, what many importers may not realise is that the invoice price can often include a number of non-dutiable elements, which may result in duty overpayments, for instance;

BUYING COMMISSIONS;

POST IMPORT CHARGES;

DISTRIBUTION COSTS; AND

CERTAIN ROYALTY PAYMENTS.

Equally a number of “hidden” costs such as:

TOOLING;

DESIGN WORK;

SELLING COMMISSIONS.

Which may not be included in the invoice value may inadvertently cause an importer to under declare the value of goods resulting in duty underpayments.

A customs valuation review can often result in opportunities to reduce your liabilities and provide the opportunity to reclaim any overpaid amounts.

ORIGIN VERIFICATION SERVICE

The EU has many preferential trade agreements with other countries and groups of countries.  Under these  preferential arrangements  it is possible for your suppliers to export their products to the EU at reduced or zero rates of duty.

It is important to note, however, that benefit from these arrangements  may only be taken where the goods meet the specified rules of origin for the goods concerned, it is not sufficient for goods merely to be exported from a preferential country for the goods to be entitled to the preferential rate of duty.  Many businesses have faced retrospective duty demands for goods they believed were entitled to the preferential rates of duty.

With the cost of goods from traditional Far East suppliers gradually rising the use of suppliers in preferential countries is becoming more prevalent.  Nevertheless, as there is inherent risk in the purchase of goods from preferential counties importers should review their operations to ensure any claim to preference is legitimate.

We can assist in the review process to ensure you are compliant with the complex preferential trade agreements supporting your claim to preference.