Background
Electronic commerce can be defined as
business transactions taking place through the electronic transmission
of data over communication networks such as the Internet. It
is based on the electronic processing and transmission of data,
including text, sound and video. It encompasses many diverse
activities including electronic trading of goods and services,
online delivery of digital content, electronic fund transfers,
electronic bills of lading, commercial auctions, design and
engineering, sourcing, public procurement, direct consumer
marketing and after-sales services.
When establishing the treatment of imported
supplies for customs duty purposes a distinction need to be drawn
between goods ordered electronically but delivered by traditional
means and direct on-online delivery. Members of the World Trade
Organisation have agreed not to impose customs duties on international
electronic transactions, and in line with this agreement goods
ordered and supplied electronically such as software and books
will continue to be treated as ‘services’ and as
such be free of import duties, but remain liable to VAT. Goods
ordered electronically but delivered physically continue to attract
the rate of duty appropriate to that commodity.
As ordering goods through the global
marketplace represented by the Internet becomes more common,
it is likely that suppliers will take the order in their local
website, but arrange for it to be fulfilled locally.
How can we help?
We can provide clients with practical
solutions to fast track them through
the regulatory minefield as they roll-out their e-commerce strategies
to ensure that inter alia:
- the evolving strategy takes full
account of customs consequences;
- potential customs benefits are figured
into the decisions on alternative structures;
- the effect on customs compliance
obligations is known;
- the regulatory environment is observed
and obstacles to change identified;
- double duty hits are avoided
- returned goods relief’s
are fully utilised; and
- automated customs returns systems
are set up.
Our customs systems experts can provide assistance with the integration
of simplified and paperless customs procedures - maximising the
use of commercial information to trigger electronic customs declarations
to Customs.
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