The Wholesale Forums

[ShippingDude]

I see a lot of talk on here about how to avoid Duty and Taxes (VAT for those of you in the UK).

I deal with a lot of major importers who pay millions (yes, Millions) each year in Duty, Taxes, and Customs exams each year (yes, year).

While I understand the plight of the small to midsize importer's scales of economy, please realize that trying to increase or make your profit by going around Customs just isn't business-wise.

Customs isn't here to differentiate between a small importer vs. Wall-Mart-sized importers. They want to charge duty and tax on EVERY item that comes into their country that they feel deserves it.

Marking items as "gifts", "low-to-no value", or "hoping" you don't get a bill isn't the way to make a profit. You'll get snagged. Maybe not today's shipment. Maybe not
tomorrow's shipment. but you will eventually get charged.

Also note that Customs keeps lists. If they catch you doing something you shouldn't once, they'll check you everytime.

[jamestyrer]

Good post - i have said the same myself before. There are instances where goods pass through customs and dont get taxed. However this situation should be treated the same as going to a shop and being under-charged at the counter...dont bet on it, but if it happens its a bonus!!

[Anthony]

[I think we'll give this thread some air time. It has been pinned to the top.]

I'm glad you actually brought this up. I believe many small businesses see it as an opportunity to get one over on customs and the country they reside in. I also believe that the reason why many see this as an opportunity to avoid the taxes is because of a lack of understanding and education of the principles of importing goods.

We all know that that extra portion of a margin would do nicely to retain but if you play with fire, be prepared to get burnt, these guys will show no mercy to those who try to exploit the system. That isn't scare tactics either, its reality.

There are short cuts in business but tax evasion is not one of them.

[RWA]

Not to scaremonger, but depending on the offence if you do get caught you could be looking at spending sometime in prison.

[ShippingDude]

Thanks guys.

[studio1one]

thing is, if you ru n your business properly you will be losing money anyway.

If you underdeclare the value of your items you will pay more corporation / income tax.

If you are importing you should be VAT registered so can claim it back and the corporation / income tax is higher than import duty 99% of the time.

It simply doesn't work.

[londonking]

Remember, avoiding tax is legal. Evading tax is illegal. Let's take an example, if I want to import a container of garments from India it will cost me about 15% in import duties. I could import the same stuff from Bangladesh and it will cost me 0% duties. So therefore I have avoided myself paying import taxes of 15%.

[PIWAY]

In the country I live in we pay 40% to customs when using a courier service, and 34% through the post which to me is ridiculous. My friend who works at the post office asked a senior colleague and was told that it's ok to underdeclare, so I've done it a couple of times with a couple of small purchases. I haven't asked our local customs office yet. Is their a legal away to get around this? If anyone could explain to me how customs works or show me a link, I'd appreciate it.

[RWA]

PIWAY,

londonking has already explained the legal way to do it, source the same items from another country.

[PIWAY]

I'm not sure if that will work over here. Every country is taxed.