Strategizing International Tax Best Practices – by Keith Brockman

The United States Trade Representative (“USTR”) announced it was granting an exclusion to an additional 21 Chinese-origin products meeting specific listed descriptions, as described in EY’s Global Tax Alert included for reference.

Best Practices include:

  • Mapping the complete, end-to-end supply chain to fully understand the extent of products impacted, potential costs, alternative sourcing options, and to assess any opportunities to mitigate impact such as tariff engineering.
  • Identifying strategies to defer, eliminate, or recover the excess duties such as bonded warehouses, Free Trade Zones, substitution drawback, Chapter 98 and equivalent programs under China customs regulations.
  • Exploring strategies to minimize the customs value of imported products subject to the additional duties, re-evaluating current transfer pricing approaches, and for US imports, considering US customs strategies, such as First Sale for Export.

Duties/tariffs are a significant component of product costs, supply chain management and controlling costs.  This function should have a global oversight / value-add function which requires talented personnel with the technical acumen to drive this initiative.  

https://www.ey.com/Publication/vwLUAssets/USTR_publishes_new_exclusions_for_Chinese-origin_products/$FILE/2019G_001932-19Gbl_Indirect_USTR%20publishes%20new%20exclusions%20for%20Chinese-origin%20products.pdf

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