Import duties are very important in international trade. However, there are plenty of companies and businesses that may pay more duties than is required by law. This could affect the profit of any business greatly. It is in your best interest to make shipping your products as easy as possible.
Reducing Customs Import Duties for Your Business
There are a variety of ways you can reduce customs import duties. The money that you pay for duties depends on various factors. Controlling these factors can lead to bigger profit margins and help you save.
International can generate plenty of forms and paperwork and even though this can be tiresome, it is important to keep everything in the books.
As well as keeping up with paperwork, you should make sure to fill out forms and store them correctly. If you misplace import paperwork, you can expect to find yourself dealing with shipment delays.
Below are some of our favorite tips on how you can ease the impact of importing on your business.
1. Differences Between Countries
Each country has its own tariff. This includes import tax, with different rates and rules. The procedures at customs change at each international border.
This is even the case for neighboring nations and can be very different depending on the area. Do not assume the same tariff applies to each country as this can cause problems later on.
2. Responsibility Of The Supply Chain
There are a whole host of companies that have to take on the task of assigning tariffs and calculating duty rates.
Some companies leave the issue to the providers of transport and fulfillment. Some of these providers will suggest they can correctly classify products and calculate duty rates.
In reality, these providers are not obligated to correctly assign any forms. It will be your responsibility if you do not pay the necessary fees, not the shipping provider, even if it was them that misclassified shipment or make an incorrect estimate.
If they make a mistake, you have to prepare to take on the burden.
3. Checking Information
It can take a lot of work getting your duty and customs rates correct for all the products you have.
The obvious problem here is that rates and taxable products are always changing. A drop in oil prices and a change in currency cause governments to look for new sources of tax revenue.
Many imports are also being taxed a lot more than before. Rates that were valid last year may be out of date. Refused shipments are usually because of a reliance on older rates.
4. Value Of Products And Goods
This goes without saying, but undervaluing goods is an easy way to incur penalties and companies often engage in this practice.
Companies undervalue items often to avoid paying a higher duty rate. Some companies use a lower estimated value regardless of the product’s actual value. This lets them take advantage of low-value policies or even duty-free ones.
The problem is, governments notice this tactic and are becoming less and less lenient. Custom processing delays and large fines are normal if you are engaging in such practices.
5. Researching Regulated Products
There are many countries where specific products have to be in line with import duties. Certain countries may incur additional charges on items with special stipulations. Unfortunately, these costs are not always small.
The products that are regulated vary from country to country, these products aren’t always obvious. In fact, some products are under regulation to maintain the state of domestic trade.
In some situations, a product may have illegal status. One particular example is Nigeria, where there is a ban on imports to protect trade.
6. Using Tariff Codes
Want to know one of the most difficult and time-consuming aspects of calculating customs duty correctly?
It’s making sure that every product that you have on your catalog is assigned a tariff code. With tariff codes, the first digits are always locked in internationally. The last digits vary by country.
Getting this code wrong, or using the code of another country can lead to many additional costs. Each product in your catalog needs to be looked at on an individual basis to make sure the correct code is applied.
7. Total Landed Cost
Every company should take care to calculate the international custom duties on all shipments. However, this is often not the case. Many companies do not consider VAT, GST, and other taxes locally that can impact the whole cost.
It is very important to remember that the total landed cost is a combination of many factors. Duty rates can only take you part of the way towards a comprehensive calculation.
When calculating the total landed cost, just make sure to take all factors into account. This includes the value of your order, door-to-door costs, shipping insurance as well as other factors. This will give you a thorough picture of the cost you have to pay.
Importing The Right Way
Keeping on top of import duties costs can be difficult – however, with the correct due diligence, you can save money by moving goods regardless of taxes and duties. Need your packages handled the right way? Take a look at our services here.
