Pay duty on manufacturing cost, not sales price
Typically, foreign suppliers pay duty on the sales price. Using CAPLINQ's order fulfillment service, foreign manufacturers pay duty on the manufacturing price.
Duty is levied on foreign goods coming into the EU. The amount of duty that is paid on these goods depends on:
- The value of the goods
- The harmonization code of the goods being imported
Duty must be paid on the value of the goods being imported into Europe
Whether the goods are worth $1 or $1 million, the tax authority demands that the value of the goods be declared and imposes duty on them. Typically, foreign companies pay duty based on the sales invoice (the sales price). With CAPLINQ as your fiscal representative, foreign companies pay duty based on the Cost of Goods Sold (COGS). CAPLINQ can often make the goods available to your customers in Europe for less than they typically pay in duty charges alone.
See the Frequently asked Questions on Order Fulfillment Pricing to find out how CAPLINQ makes it possible for you to pay duty on the COGS.
The harmonization code determines the duty rate
The typical duty rate on many harmonization codes coming into Europe is 6.5%. This rate is not a fixed rate and may change per product depending on:
- The product's current availability within Europe
- Desire of the European Union to encourage/discourage import
- Global competition of the product
CAPLINQ fights to get you the lowest Duty Charge
Using CAPLINQ's order fulfillment service, CAPLINQ becomes your fiscal representative. As such, CAPLINQ can lobby on behalf of the foreign supplier to get the lowest possible duty rate. Often times, CAPLINQ can negotiate and lock in a lower duty rate because of our local and specialized knowlege.