Import duty - who's right?!

Discussion in 'International Business' started by kevin.doran, Jan 13, 2021.

  1. kevin.doran

    kevin.doran UKBF Ace Full Member - Verified Business

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    German supplier buying furniture from Asia, receiving into Germany then selling to UK businesses.

    Dutch supplier buying the same furniture from Asia, receiving into Holland then selling to UK businesses.

    German supplier says there will be import duty as the goods were manufactured in Asia, Dutch supplier saying there's no duty as it's covered under the Brexit deal.

    Who's right?!
     
    Last edited: Jan 13, 2021
    Posted: Jan 13, 2021 By: kevin.doran Member since: Nov 28, 2011
    #1
  2. scstock

    scstock UKBF Regular Free Member

    138 27
    Last edited: Jan 13, 2021
    Posted: Jan 13, 2021 By: scstock Member since: Mar 27, 2009
    #2
  3. The Byre

    The Byre UKBF Legend Full Member

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    If duty is due when entering the free-trade zone, it must be paid. Obviously.

    If it is paid on entry, that's it. If it has not been paid, it is still due.
     
    Posted: Jan 13, 2021 By: The Byre Member since: Aug 13, 2013
    #3
  4. kevin.doran

    kevin.doran UKBF Ace Full Member - Verified Business

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    So you're saying if the German/Dutch suppliers have paid duty when importing into their respective countries from Asia then no duty will be due when selling onto UK businesses?
     
    Posted: Jan 13, 2021 By: kevin.doran Member since: Nov 28, 2011
    #4
  5. Mike Foulds

    Mike Foulds UKBF Regular Free Member

    121 42
    Both, potentially. Depending on how the goods were imported into Europe, and how the company in Germany/Holland will be handling/exporting to the UK. For example, if the cargo is brought into Europe (Country is irrelevant), and cleared as a Temporary import, then re-exported to the UK, there would be no duty payable on arrival in Europe, but it would be when the cargo arrives in the UK. However, if cargo is imported from Asia to Europe as a standard import, with duty paid, and then exported from Europe to UK as a standard import, then Duty would be payable again. There are other situations where duty could be avoided being paid twice, but it depends on the customs procedures being used at all stages, and how savvy your suppliers in Germany/Holland are.
     
    Posted: Jan 13, 2021 By: Mike Foulds Member since: Mar 21, 2018
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  6. scstock

    scstock UKBF Regular Free Member

    138 27
    "The UK’s continued membership of the European Union’s Single Market and Customs Union during the transition period to the end of 2020 has meant that businesses have been able to trade with the EU tariff-free without the need for customs declarations or meeting rules of origin. After 1st January 2021, the transition period will have ended, and the UK will move to trading based on a new Free Trade Agreement (FTA) – the Trade and Cooperation Agreement (TCA) between the UK and the EU.

    To benefit under the TCA, goods will have to be of UK or EU origin. This means they must meet the UK-EU preferential rules of origin. These rules are set out in the TCA and determine the origin of goods based on where the products or materials (or inputs) used in their production come from. Their purpose is to ensure that preferential tariffs are only given to goods that originate in the UK or EU and not from third countries (i.e. those apart from UK and the EU Member States).

    Goods that do not meet the rules of origin can still be traded but they will not be able to benefit from preference under the TCA and may have to pay the standard (“Most Favoured Nation”) tariffs that the EU and UK apply to imports. For exports to the EU, this will be their Common External Tariff. Likewise, for imports to the UK, this will be the UK Global Tariff"
     
    Posted: Jan 13, 2021 By: scstock Member since: Mar 27, 2009
    #6
  7. The Byre

    The Byre UKBF Legend Full Member

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    The magic word here is Zolllager - similar to an entrepôt or transshipment port. The difference here is that a Zolllager can be public or in-house and comes in different types, some of which mean that it is only there for the temporary storage of goods or materials that are to be exported and therefore do not need to have import duty levied upon them.

    The two basic types of Zolllager are public (Types A, B and F) and private (Types C, D and E) and each type fulfills a different function.

    Duty obligations travel with the goods, so if you get parts to be used in a completed product (e.g. CPUs) that are duty unpaid, you must pay, even if the importer declared (falsely) that all duties were already paid.
     
    Posted: Jan 13, 2021 By: The Byre Member since: Aug 13, 2013
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  8. JRatron

    JRatron UKBF Contributor Free Member

    96 9
    Is that a name for what's being called a 'bonded warehouse'? That affects whether the Dutch or German company has to pay import duties on the goods when they arrive in the EU, as they can state that the goods are for re-export and don't ever enter their tax system, but surely that makes no difference to whether duty is due on the products when they enter the UK?

    If a German or Dutch company sells products which originate from outside of Europe into the UK, there will be duties to pay (unless it's something with a really specific exception)
    That's the rule for trade in 2021
     
    Posted: Jan 13, 2021 By: JRatron Member since: Jan 30, 2006
    #8
  9. kevin.doran

    kevin.doran UKBF Ace Full Member - Verified Business

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    The Dutch company have now admitted they're wrong.

    I think the rep was just trying to sweet talk my wife into an order ;)
     
    Posted: Jan 13, 2021 By: kevin.doran Member since: Nov 28, 2011
    #9
  10. The Byre

    The Byre UKBF Legend Full Member

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    Yes - except it has a different legal status in Germany and there seem to be all kinds of different types of Zolllager. We do our duty stuff in Germany and in German, so our Mrs. M who controls all that nonsense is our Zollbeauftragter (duties officer) and so I only know that stuff in German!

    Useless fact for the day - Zolllager is one of the few German words that is allowed to have three Ls in a row.
     
    Posted: Jan 13, 2021 By: The Byre Member since: Aug 13, 2013
    #10