SAVING COSTS WITH TARIFF PREFERENCES
No necessity to pay customs duties for imports and exports and thus use the saved costs for more flexibility in pricing – that’s what every company wants. Free trade agreements facilitate international trade. Bilaterally, between two countries or in unions, the contracting parties agree on reduced tariffs or even tariff exemptions on various products with a certain origin. Everyone can use it!
However, to be eligible for customs concessions, the challenge is to ensure that the origins of the products are correctly defined and documented with proof of origin in the master data. Determining the origin is not always easy. The origin of a product depends on where the product was last processed or refined, whereby simple activities such as simple order picking or attaching labels do not count. However, the portion in value and the origin of the primary materials in the end product also have an influence.
If the administrative effort is greater than the savings in customs costs, it is not worth taking advantage of every tariff advantage of every free trade agreement. With our PREFERENCE ANALYSIS, we find out whether the use of a free trade agreement is worthwhile or not. We concentrate on 4 steps for trading companies – production companies require one step more *:
1. Sales
* Extra-step Production
2. Procurement
3. Master data & Print logic
4. Organisation & Processes
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