Würth Logistics - Origin of Goods & Preferences
Make use of Free Trade Agreements - save customs costs
How would you feel about not having to pay any customs duties for imports into a different market and instead being able to use these funds to offer greater pricing freedom? Any company would surely be delighted with this. Free trade agreements – whether bilateral between two states or concluded as a union – simplify international trade thanks to reduced customs duties and in some cases even customs exemptions.
The reduced tariffs or exemptions defined as per the free trade agreements can be used by everyone, although certain conditions do have to be met here, which can lead to costs. For example, the origin of the products must be entered correctly in the master data and confirmed with a proof of origin certificate. Proving the origin of products is not always easy here. The origin of a product depends on where it underwent its last processing or refinement step, although basic activities such as order picking or application of labels do not count toward this. However, the share and origin of precursor materials in terms of the total value of the end product do have an influence.
Utilizing customs concessions associated with a free trade agreement only really makes sense when the customs cost savings are greater than the administrative costs involved. This is precisely what we visualize with our free trade preference benefit analysis.
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