The world is now smaller than it has ever been, in terms of the ability to communicate with and do business across the globe in an instant. While modern technologies have made it easier to link up with people across the world, there is now an increasing need for international borders to be crossed, both for travel and trade. This makes it all the more important to understand different customs and tax regimes for importing and exporting worldwide, and there are as many different rules as there are countries. This makes it challenging to do this type of business, to the point where many feel they need the assistance of a customs brokers Canada to steer the process through to a satisfactory conclusion.
For those in the business of moving goods overseas and across borders, the law here is a potential minefield of difficulty. Making the wrong move can not only cost you a great deal of money, but it can also lead to delays in your supply chain, or disappointment for your customers. There are many factors businesses need to take into account in these instances. To understand how to work with these systems, it is essential to firstly understand how they work and why they exist in the first place.
Customs are set up by governments to regulate the inflows and outflows of goods through a country. Perhaps the most obvious reason for this practice is to ensure that taxation and duties are being appropriately paid on goods shipping in to the country. Customs can deliver sources of revenue for government coffers, through applying tariffs, fees and expenses on to the cost of doing business. This is an important stream of income for governments, as is ensuring that no tax-free illegal goods are being smuggled through the border.
Another major reason customs exist is to tackle the problems of international smuggling. If there were no customs officials, it would be simple for drugs, people and weapons to be trafficked around the world, seamlessly flowing into and out of the countries concerned. It is customs officers and officials who fight against drugs and exploitative gangs in the first instance, and as a result they are essential for maintaining order.
For businesses and investors, the concerns are more with the economic impact of customs. This can welcome or fend off trade, depending on the political objectives of the state at the relevant time, but is considered by many to be a risk of doing business internationally. Companies often find it difficult to keep ahead of increasingly complex import and export requirements, and very often seek the assistance of customs brokers to advise on the most cost-effective options for completing trade paperwork.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
The Costs of Importing
Many businesses that are new to importing from abroad are of the view that the total cost of the goods they buy will be the total cost they will pay to receive them. This is pure fantasy, not least because of the costs of international freight and shipping. Companies need to find cost-effective ways to get goods into the country, to ensure an adequate supply of product for their business. But in addition to these costs, you may be required to pay additional levies on your imports, which will increase the total overall cost of your order. These factors are unavoidable as a rule, and you simply need to price them in to the costs of doing business. This can feel frustrating at times, but it provides the revenue with more money and allows for government policy to encourage and dissuade certain types of business transactions.
This helps governments better control their economies, and in particular their balance of payments with other countries. This ensures that balance can be restored between respective levels of import and export with the individual economies concerned.
Factors For Exporting
Exporters may have to face many of the same restrictions before they can encourage their goods to leave. Generally, there are more issues on the import side, and this is where the authorities will look to take full advantage. But when you are exporting goods, you may be required to fill in paperwork to ensure there is a sufficient record of your transactions. This might be accompanied by the need to foot the initial shipping costs, with the need to arrange for collection and distribution to begin from your end. These ultimately tend to be passed on to those receiving the exported goods as costs, but this can cause cash flow problems in the interim, as well as leaving a number of customers feeling bitter and out of pocket.
Before importing or exporting any goods, it is worth arranging a meeting with a customs broker, who can help you prepare for the necessary requirements of your transactions.
For many organizations, paying the administrative costs and the fees associated with customs is part and parcel of daily business. Unfortunately, for smaller-time operators, these costs can often prove prohibitive without further financial backing. This makes it difficult to navigate the system in a profitable way, and means that prices simply have to rise to preserve any kind of end margin. This can have a negative impact on potential capacity, and your goods may be less competitive for resale as a result.
Importing and exporting are becoming increasingly prominent areas of international logistics. Businesses of all shapes, sizes and types are engaging in these types of practices for the first time, and it can be difficult to understand fully how the process works, even when you have had firsthand experience of it in the past. Customs brokers can be extremely helpful in ensuring you get the right information and guidance to handle the relevant requirements. Many big businesses choose to work with professionals in the field to ensure the lowest possible cost level of compliance. This ensures that customs fees are kept to a minimum, and that the supply chain can continue to function as smoothly as before.