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How to Save on Import Duties: 4 Money Saving Tips for your Business

The goal of every business is to get customers, make a profit, and minimize loss to a bare minimum. While such a goal may be easily achievable for some businesses, companies that deal in imports may find it difficult because of the outrageous import duties they pay.

Import duties are fees imposed on imported items. If not careful, these fees can eat into your company’s revenue, slowing business growth. To ensure that such doesn’t happen, you need to figure out how to legally ease the effects of import duties on your business.

Lucky for you, we have your answers. We have researched how to save money on import duties, and here are our findings.

What are import duties?

When importing goods from a country, you are required to pay a few charges; import duties are one of them.

So what are important duties?

Import duties are charges levied on goods imported from one country into another. The charges vary based on the value of the imported goods, including factors like restrictions. Import duties are synonymous with custom duties, import turnover tax (EUst), and other excise duties imposed on imported goods.

Reducing Customs Import Duties for Your Business

Yes, it’s possible to reduce the excessive import duties you pay. In fact, there are many ways to go about it. We have highlighted some of the ways below.

1. Duty drawback

Your company can take advantage of duty drawbacks to reduce their import duties.

That said, what are duty drawbacks, and what does it do?

Duty drawback is the refund of charges like custom duties, taxes, and fees paid on imported items that are identical to subsequently exported or destroyed items.

With this initiative, business owners can receive 99% of refunds of duties, taxes, and fees paid on imported products, if those products, comparable products, or products produced from the imported products are exported within five years. To use this initiative to your favor, you’ll need to find a custom brokerage that offers the duty drawback options. Such professionals should be licensed and fit your important needs.

2. Responsibility for the supply chain

There are many companies that have to shoulder the task of assigning tariffs and calculating duty rates. Some companies, however, leave the burden to the logistic companies. Some of these companies will suggest they can correctly group products and calculate duty rates.

In reality, these companies aren’t required to correctly assign any forms. It will be your responsibility if you fail to pay the necessary fees, not that of the logistic company or shipping provider, even if it was them that mixed up shipment or made a wrong estimate. If they make a blunder, you have to be ready to be responsible and pay extra charges if needed. Fortunately, you can complete many processes online nowadays, making supply chain management much easier. For example, ISF Filing Online can help you to get your ISF filing completed within 6 hours, helping to speed things up too.

3. Apply the right customs labels to eliminate excess duties

Without the right labels, customs might examine the goods and determine the customer owes extra import duties. To avoid using the wrong labels for your packages, talk to your local post office.

With their help, you can ensure that you have the right labels to prevent customs delays or paying extra fees. You can also leverage automated shipping to get rid of such mistakes. 

To double-check your package labels, visit the website of the customs authority in the country you are shipping to. There should be a section for labels that you can view to ensure that no mistake has been made.

4. Autonomous tariff suspensions

Custom duties are charges put in place to protect domestic industry rather than boost the revenue of a country. Autonomous suspensions can be used to remove customs duty on imports of raw materials and parts that are scarce in the European Union or the United Kingdom.

Businesses can apply and lobby for a new tariff suspension and, if approved, they will discard tariffs on those imports for five years or more.

Brexit is likely to give rise to greater potential in this aspect as the UK looks to determine goods made in the UK rather than entire Europe. There are a lot of existing suspensions already set up that businesses aren’t aware of, and care should be taken to inspect all the individual tariff lines around your imported goods.

Conclusion

Reducing custom duties will save your business a lot of money which will be re-invested in other core areas. While you try to cut down on import duties, ensure you do things right so you don’t incur additional charges that could increase the costs of importing your goods. 

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