Import duties are a significant element of international trade. Although they entail some expense for your business, you must spend without thinking twice to be on the right side of the law. But the fact is that many companies end up paying more duties than needed only because of a lack of awareness and understanding of the customs law. It can affect your profits severely, so you must do your bit to reduce customs duties to a minimum.
Luckily, there are many ways to limit them because the money you pay depends on various factors. You can control these factors to cut the expense and boost your profit margins in the long run. Everything boils down to awareness and strategic planning. Here are a few expert tips to minimize customs duties for your business.
Do not take a one-size-fits-all approach
Taking a one-size-fits-all approach means you may end up overpaying duties and taxes. You must understand that tariffs differ for different countries as they have different rates and rules. Likewise, procedures at customs are also not the same at each international border. The laws can vary even for neighboring nations. Avoid assuming that the same tariff will apply to every country you import from. You may end up making blunders with your estimations and calculations if you do not check country-specific rates and rules.
Pay close attention to the supply chain
Taking a responsible approach to the supply chain can take you a long way in cutting the cost of customs duties. When you are in the import industry, you have to manage tasks like assigning tariffs and calculating duty rates. You may lead the responsibility to your transport and fulfillment providers if you trust them enough. But these providers do not have the obligation to correctly assign any forms. You must do your bit to double-check documentation and calculations in the supply chain, no matter how reliable your provider is. A small mistake can land you in trouble, so be extra watchful about everything.
Claim duty recovery
Besides cutting down customs duty, you must know that you can claim recovery if you overpay. Many business owners end up paying more than they should only because they are not aware of the updates in the law. You can collaborate with experts for duty recovery services to claim refunds for the extra payments under the duty drawback program. You are legally entitled to recovery, so do not miss out on the opportunity only because the drawback process sounds too long and daunting. It is easier than you imagine, and experts can help you complete it and get the money back into your business.
Check details
Another proven method to minimize duties for your business is to check details thoroughly before paying. It takes some effort to get your custom rates correct because they are ever-changing. Events like changes in the currency and a drop in oil prices lead governments to explore new sources of tax revenue. Customs duties often bear the brunt of such situations. Ensure to check the updates every time you receive a shipment. Even better, have an expert broker looking after the process for you because they are always a step ahead of the latest updates.
Value good correctly
Valuing your products and goods correctly is the key to steering clear of penalties that can hike your customs costs significantly. Companies often undervalue items only to avoid paying a higher duty rate. They use a lower estimated value to take the advantage of low-value policies. But it can land you in deep trouble with hefty penalties and processing delays down the line. Governments keep a close watch on importers, and they are likely to spot dishonest practices sooner than later. It is not worthwhile because you may have to spend a lot more than you save.
Use tariff codes
Assigning correct tariff codes to every product on your catalog is a money-saving practice you can rely on. However, importers often see it as one of the most complicated and time-consuming aspects of the business. But the effort is worthwhile because getting your tariff code wrong or using another country’s code can bring many additional costs. Check each product thoroughly and be sure to apply the correct code to steer clear of such mistakes.
Reducing the cost of customs duties is easier said than done. But it is worth the effort because every dollar you save is an investment for your business. The best option is to collaborate with an expert broker to help you cover all fronts. Look for someone with duty drawback expertise to go the extra mile.
Author Bio: Shelly Ramos is a content writer, digital marketer and investor who has been working for the past many years and spreading her knowledge over the internet. Her articles are published on reputable websites and she wants to share her thoughts with the audience. She specializes in the business and finance niche.
