Custom duties make an integral part of international trade. If you operate in this domain, you must stay ahead with information and payments to avoid getting into a fix with the authorities later. Likewise, ensure that you do not pay more than needed because plenty of businesses end up doing it. Fortunately, there are ways to reduce customs import duties for your business.
You must understand the factors influencing your bills and rework them to save and grow your profit margins. Additionally, you can prevent penalties by staying on the right side of the law. Let us share some tried and tested tips to lower customs bills for your business.
Understand Country-Specific Differences
Taking a one-size-fits-all to duties and tariffs is the worst error you can make. In fact, you may find yourself paying a lot more than you should by assuming that you need to pay the same rates everywhere. You must understand the country-specific differences because each country has its own tariff with different rates, procedures, and rules.
Even two neighboring nations may have completely different ecosystems. Dig deep into the markets before adding them to your wish list. Avoid calculating the tariffs with the same rate and formula everywhere.
Check Information Diligently
Besides going through the country-specific tariffs, you must check the information at your end diligently. Getting the rates correct for multiple products and destinations can be tricky, but you must invest the effort it requires. You may encounter more complications as the rates and taxable products are ever-evolving.
Some imports may have higher tax rates, while others may witness a drop. Getting the rates wrong puts you at risk if refused shipments and penalties, so get ready to go the extra mile with information checks.
Value the Products Correctly
This one is a no-brainer if you want to keep trouble at bay and prevent massive customs penalties. Undervaluing products may seem an attractive proposition, as you may get away with paying a lower duty rate. But you cannot undermine the risk of getting noticed by the authorities for the illegitimate act.
A small saving on taxes is not worth the risk of paying a huge penalty and losing your reputation. You may probably manage to lower your bills a few times with this tactic, but the legal repercussions can be daunting once you come under the radar.
Collaborate with an Expert
Customs duties are complex, and overpayments are more common than you imagine. You are likely to pay more due to a lack of knowledge or incorrect calculations. The good thing is that you can recover the extra amount by claiming a duty drawback. Consider collaborating with a knowledgeable customs brokerage team to avoid paying extra in the first place. They can help you claim a duty drawback if you end up overpaying.
Moreover, having experts on your side can save you from mistakes that may lead to penalties and shipping delays down the line.
Avoid Relying Too Much on Supply Chain Partners
Calculating duty rates and assigning tariffs is entirely your responsibility. Leaving these tasks to your supply chain partners sounds like an easy way out, but it is the last thing you should do. While some providers offer to help with classifying products and calculating duty rates, these tasks are not part of their work.
Moreover, they will not have to bear the brunt of misclassifying shipments or making incorrect estimates. The burden of penalties falls upon the business owner, so it is better to handle the task on your own.
Pay Attention to Tariff Codes
Another way to cut down your customs bills is by paying attention to tariff codes. This area deserves time and effort because tariff codes differ for products and countries. Getting the codes right becomes challenging if you have a broad product catalog or trade with several countries.
You must check every product in your catalog individually and verify its tariff code before going ahead with the shipment. Not doing so can lead to delays and hefty penalties, and both can take a toll on your business.
Lowering your customs bills is about running your business the right way. You cannot skimp on diligence while assigning codes and calculating the numbers.
Moreover, staying ahead with your paperwork is crucial. Leaving things to chance can get you in a fix, but you can avoid such problems by paying more attention. Having an expert overseeing the customs process is an excellent idea as it lets you focus on growth-critical aspects instead of worrying about duty bills and penalties.