Customs appraisement involves the application of complex statutory formulas to determine the dutiable value of imported merchandise. The manner in which import transactions are structured and documented frequently affects dutiable value. Careful attention to detail can result in substantial duty savings and penalty avoidance.
US Customs and Border Protection (CBP) is charged with closely scrutinizing declared values and has responsibility for related enforcement efforts designed to maximize compliance. CBP’s efforts may be coordinated with those of the Internal Revenue Service, whose regulations require parity between a product’s inventory basis for tax purposes and its finally determined customs value.
We work closely with tax counsel to maximize tax and customs benefits while ensuring compliance with all applicable rules and regulations. A joint review and analysis of a firm’s customs and tax structure often leads to strategic changes to corporate organization and sourcing approaches that can yield meaningful tax and duty savings.
Potential duty savings or liability often arises in transactions involving:
- Buying agents
- Middleman sellers (triangle trade or multi-tiered sales, e.g., implementation of first sale programs)
- Materials, machinery, or design assistance being provided to sellers
- Royalty payments
- Inter-company pricing
- Defective or late shipments
Proper management of these relationships and obligations can provide significant duty savings and prevent surprise assessments.