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Avoiding Duty and Taxes on Imports

Discussion in 'Import & Export' started by ShippingDude, May 11, 2009.

  1. ShippingDude

    ShippingDude

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    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.
  2. Simple Aquatics

    Simple Aquatics

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    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!!
  3. Anthony

    Anthony

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    [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.
    1711 likes this.
  4. RWA

    RWA

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

    ShippingDude

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    Thanks guys.
    Pranav Jain likes this.
  6. studio1one

    studio1one

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    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.
    kinsorted likes this.
  7. londonking

    londonking

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    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%.
    kinsorted, Lewis Wade, Bizi and 3 others like this.
  8. PIWAY

    PIWAY

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    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.
  9. RWA

    RWA

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    PIWAY,

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

    PIWAY

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

    RWA

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    Yes however you pick the country that has the lowest % of import duty.
  12. PIWAY

    PIWAY

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    not sure how to do that, and it sounds a bit shady. Just found out from our local customs office that underdeclaring here is illegal, so I'll just pay the full price from now on. Thanks for all the good advice on this thread.
  13. RWA

    RWA

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    There is nothing shady about it, you are reducing your tax liability which is completely legal.

    You are not under declaring the value of the goods. You are just sourcing the goods from a country with a different import tariff.
  14. PIWAY

    PIWAY

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    "You are just sourcing the goods from a country with a different import tariff"

    Sorry I'm a newbie, can you explain to me how to do this in more detail. Over here if you import outside of the EU you generally pay higher customs. The tariff is based on where the product is manufactured not from where it is shipped from. I'm getting stuff made for me in China, are you suggesting that I should state that the product is made in Europe? Thanks in advance.
  15. Simple Aquatics

    Simple Aquatics

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    Why are there so many threads about trying to avoid duty and VAT - why dont you spend your time getting new sales and making more money and stop worrying about a system that has been in place for years and you simply wont be able to bypass on a regular basis!
  16. RWA

    RWA

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    I'm not stating that. Best if someone else answers your question.
  17. RWA

    RWA

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    It's a perfectly valid question being asked.
  18. Simple Aquatics

    Simple Aquatics

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    No - the question being asked is how to "avoid duty and tax in imports" - as per the title of the thread. Im simply making the point that you can spend hours trying to find a way to break the law and some methods of course work. My point is why not try and incorporate the legal tax and VAT rates into the business model and concentrate on selling and developing the business!
  19. RWA

    RWA

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    Some goods don't attract duty, however you won't be able avoid the VAT.

    Again people are always looking for ways to save money in business. I always take into consideration that there will always be import duty and VAT, doesn't stop people from asking though.
  20. Simple Aquatics

    Simple Aquatics

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    I agree to best way to "aviod" duty is to buy goods that dont attract it!! That truly is a bronze droplet of import wisdom there - i hope people take heed!
    Krivvenz likes this.
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