Impact of US tariffs

The US administration has recently introduced new tariffs on imports of goods into the US, which may have a significant impact on the costs of businesses. The basic customs duty rate is currently 10%, and the additional duties imposed on the EU are at 20%. Below, KPMG's tax team aims to offer assistance in identifying savings opportunities and mitigating costs.

In cooperation with our colleagues at KPMG US, we have put together several aspects that can affect the amount of the customs duty. One possibility is to use the First Sale for Export concept, which allows to determine the customs duty based on the initial selling price charged by the manufacturer rather than the final price paid by the importer. Another way to lower customs duty rates is the correct determination of the origin of goods to obtain the corresponding preference under free trade agreements and the correct classification of the goods for customs purposes. It is also important to separate the costs that do not have to be included in the customs value, such as commissions, royalties or a portion of transport and insurance costs.

Businesses can also apply for customs duty refunds on downward transfer pricing adjustments, or for 99% customs duty refunds for goods that are ultimately exported from the US or destroyed. Another option is to place the goods in a free trade zone or a bonded warehouse, which allows to postpone the payment of customs duties until the goods leave the zone or warehouse.

Although a US federal court suspended the tariffs imposed by President Trump at the end of May, an appellate court reinstated them less than 24 hours later. It is therefore necessary to respond to this situation, for example, by using one of the options mentioned.

If you are interested in analysing your options, please do not hesitate to contact our team.