Customs duties apply to the importation of goods into the EU from non-EU location. Rates of duty vary depending on the product in question, and as EU customs duty cannot be recovered from the tax authorities in the way import VAT can, it is critical that businesses have a good handle on this area to ensure the duty cost in the supply chain is minimised as far as possible.
We can advise on a broad range of customs duty issues, including the following:
- Valuation (from the basic rules to unbundling, ‘first sale’ structuring)
- Classification
- Origin
- The use of customs duty reliefs and warehousing to reduce cost or manage cashflows
- Supply chain security including indepth assistance with AEO applications
- Standing instructions for freight forwarders; implementing a robust customs compliance framework dummy audits
- Training
The benefit to the business of effective EU Customs Duty management is that duty cost in the supply chain is minimised as far as possible.
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It is fair to say that with many businesses, EU customs duty has historically had a low profile in comparison with other taxes, but this is changing as a result of initiatives such as the Senior Accounting Officer (SAO) regime in the UK and Authorised Economic Operator (AEO).
These initiatives are forcing businesses to consider how they manage customs duties within their business and many find that they simply outsource customs compliance to third party freight forwarders and have little control over the content of the declarations made, often due to the fact that staff are not properly trained in this area.
The impact of this lack of awareness is essentially twofold: i) the opportunity to mitigate the duty burden as much as possible is overlooked, and ii) if customs declarations are completed incorrectly, there is a risk that the supply chain will be disrupted whilst queries are resolved.