(Roetzel & Andress - Craig A. Koenigs/Lexology)
Drawback is a refund of a customs duty, fee or internal revenue tax imposed by federal law on imported merchandise that may be claimed when the imported merchandise, or a product manufactured with the imported merchandise, subsequently is exported or destroyed under supervision of U.S. Customs and Border Protection (CBP).
It is estimated that several billion dollars of drawback claims go uncollected each year.
Generally, a drawback claimant will be entitled to a refund of 99% of the applicable duties, fees or taxes paid and will have up to three years, following exportation or destruction of the merchandise, to file a drawback claim. Therefore, a company is able to reach back and capture drawback on its past activities.
Drawback is a valuable tool that can help decrease your operating costs and improve your bottom line. Read more here.
Showing posts with label Drawbacks. Show all posts
Showing posts with label Drawbacks. Show all posts
Monday, June 14, 2010
Thursday, January 14, 2010
Small Biz to Gov: Red Tape-Trimming Targets for 2010
(GHY International)
The Canadian Federation of Independent Business (CFIB) has proposed ten specific areas for governments to work on in 2010 that will lighten the $30 billion annual load for Canada’s businesses.
According to CFIB’s latest report, 81% of small businesses believe that government does not consider the impact on business when it regulates. “Making progress on the list below would go a long way towards demonstrating that government values the critical contribution that small businesses make to Canada. It’s not comprehensive, but it is a good start,” said CFIB’s vice-president of national affairs, Corinne Pohlmann.
The following three recommendations may be of particular interest to clients:
Create a GST/HST Taxpayer Fairness Code
Canada Revenue Agency (CRA) should adopt a GST/HST Taxpayer Fairness Code. Complying with sales tax rules is the top frustration of small business owners. Businesses collect sales tax revenue on behalf of government and deserve good customer service, including clear answers to questions in a timely manner. The Tax Fairness Code should be modeled after BC’s code where business owners have the right to get questions answered in writing and any written government tax advice will be respected even if it is wrong. Taxpayers need to trust that if they have followed guidance provided by CRA officials, they will not be penalized.
Bring fairness and accountability to the Canadian Food Inspection Agency (CFIA)
Agri-business owners understand that a certain amount of regulation is important for food safety, but the CFIA could significantly improve the way it interacts with small businesses. A recent small business report card on CFIA found that fairness is lacking and many feel they have no recourse when dealing with CFIA authorities. A Food Producers’ Ombudsman with real powers to oversee how CFIA interacts with small businesses should be appointed.
Simplify the customs process
Canada Border Services Agency (CBSA) should reform the Duty Drawback program. Claiming customs duty refunds imposes such onerous paperwork burden on Canadian firms that many smaller firms who import and export are forfeiting money owed to them or choosing to operate in the U.S. rather than in Canada. One farmer has to fill out 400 forms for every container imported. His paperwork then has to be stored for seven years. The government should eliminate unnecessary duties and reduce record retention requirements for remaining duties.
Read the complete list of recommendations here.
The Canadian Federation of Independent Business (CFIB) has proposed ten specific areas for governments to work on in 2010 that will lighten the $30 billion annual load for Canada’s businesses.
According to CFIB’s latest report, 81% of small businesses believe that government does not consider the impact on business when it regulates. “Making progress on the list below would go a long way towards demonstrating that government values the critical contribution that small businesses make to Canada. It’s not comprehensive, but it is a good start,” said CFIB’s vice-president of national affairs, Corinne Pohlmann.
The following three recommendations may be of particular interest to clients:
Create a GST/HST Taxpayer Fairness Code
Canada Revenue Agency (CRA) should adopt a GST/HST Taxpayer Fairness Code. Complying with sales tax rules is the top frustration of small business owners. Businesses collect sales tax revenue on behalf of government and deserve good customer service, including clear answers to questions in a timely manner. The Tax Fairness Code should be modeled after BC’s code where business owners have the right to get questions answered in writing and any written government tax advice will be respected even if it is wrong. Taxpayers need to trust that if they have followed guidance provided by CRA officials, they will not be penalized.
Bring fairness and accountability to the Canadian Food Inspection Agency (CFIA)
Agri-business owners understand that a certain amount of regulation is important for food safety, but the CFIA could significantly improve the way it interacts with small businesses. A recent small business report card on CFIA found that fairness is lacking and many feel they have no recourse when dealing with CFIA authorities. A Food Producers’ Ombudsman with real powers to oversee how CFIA interacts with small businesses should be appointed.
Simplify the customs process
Canada Border Services Agency (CBSA) should reform the Duty Drawback program. Claiming customs duty refunds imposes such onerous paperwork burden on Canadian firms that many smaller firms who import and export are forfeiting money owed to them or choosing to operate in the U.S. rather than in Canada. One farmer has to fill out 400 forms for every container imported. His paperwork then has to be stored for seven years. The government should eliminate unnecessary duties and reduce record retention requirements for remaining duties.
Read the complete list of recommendations here.
Thursday, December 3, 2009
U.S. Customs Extends Drawback Comment Period
(Journal of Commerce Online – R.G.Edmonson)
Proposed change would eliminate drawback on goods subject to excise taxes
Exporters and other interested parties have an additional month to tell Customs and Border Protection what they think about a controversial change in drawback regulations. The agency on Wednesday extended the comment period past the original deadline of December 14 to January 12, 2010, on a proposed rule change that would keep importers from claiming drawback on goods subject to U.S. excise taxes.
Companies have been able to recover 99% of the excise taxes they pay on imported goods if they export “commercially interchangeable” products. It’s widely used in the alcohol, tobacco and petroleum industries. Read more here.
Proposed change would eliminate drawback on goods subject to excise taxes
Exporters and other interested parties have an additional month to tell Customs and Border Protection what they think about a controversial change in drawback regulations. The agency on Wednesday extended the comment period past the original deadline of December 14 to January 12, 2010, on a proposed rule change that would keep importers from claiming drawback on goods subject to U.S. excise taxes.
Companies have been able to recover 99% of the excise taxes they pay on imported goods if they export “commercially interchangeable” products. It’s widely used in the alcohol, tobacco and petroleum industries. Read more here.
Wednesday, October 28, 2009
D7-2-3 Revised: Obsolete or Surplus Goods
(CBSA)
This memorandum has been revised in accordance with the Government of Canada’s Paper Burden Reduction Initiative. This memorandum supersedes and replaces Memorandum D7-2-3 dated May 31, 1999.
In accordance with the above, the following changes were made:
a. revisions to include the new Canada Border Services Agency (CBSA) title, and updates to policy and procedures.
b. Paragraph 8, the K32-1, Drawback Claim, has been deleted from the listing of official forms and the requirement to file a K32, Drawback Claim, in duplicate has been removed.
c. Paragraph 10(b), the requirement to provide Form K32A, Certificate of Importation, Sale or Transfer, in duplicate has been removed.
d. Appendix A, Refund of Duties on Obsolete or Surplus Goods Regulations, has been replaced by paragraph 30.
e. Appendix B, K32, Drawback Claim Form, has been replaced by paragraph 31.
f. Appendix C, List of offices, has been replaced by regional CBSA, Trade Compliance Division (TCD) offices in paragraph 32.
This memorandum has been revised in accordance with the Government of Canada’s Paper Burden Reduction Initiative. This memorandum supersedes and replaces Memorandum D7-2-3 dated May 31, 1999.
In accordance with the above, the following changes were made:
a. revisions to include the new Canada Border Services Agency (CBSA) title, and updates to policy and procedures.
b. Paragraph 8, the K32-1, Drawback Claim, has been deleted from the listing of official forms and the requirement to file a K32, Drawback Claim, in duplicate has been removed.
c. Paragraph 10(b), the requirement to provide Form K32A, Certificate of Importation, Sale or Transfer, in duplicate has been removed.
d. Appendix A, Refund of Duties on Obsolete or Surplus Goods Regulations, has been replaced by paragraph 30.
e. Appendix B, K32, Drawback Claim Form, has been replaced by paragraph 31.
f. Appendix C, List of offices, has been replaced by regional CBSA, Trade Compliance Division (TCD) offices in paragraph 32.
D7-3-2 Revised: Exported Motor Vehicles Drawback
(CBSA)
This memorandum has been revised in accordance with the Government of Canada’s Paper Burden Reduction Initiative. This memorandum supersedes and replaces D7-3-2, dated January 1, 1991.
In accordance with the above, the following changes where made:
a. Revisions include updates to legislative references, D memorandum, policy and procedures and reflect the new name of the Canada Border Services Agency (CBSA).
b. Paragraph 9, the K32-1, Drawback Claim, has been deleted from the listing of official forms and the requirement to file a K32, Drawback Claim, in duplicate has been removed.
c. The following documentation is no longer required to be submitted with the claim; copies of any invoices, a customs certified copy of Form E15, Certificate of Destruction/Exportation and
a list in triplicate of the import accounting documents.
d. Where Form K32A, Certificate of Importation, Sale or Transfer, or Form K32B, Drawback Certificate for Exportation, waivers are required to be presented, the requirement for presentation in duplicate has been removed.
e. The Exported Motor Vehicles Drawback Regulations has been replaced by paragraph 21.
f. Paragraph 22 provides a reference to Form K32, Drawback Claim, Form K32A, Certificate of Importation, Sale or Transfer and Form K32B, Drawback Certificate of Sale for Exportation.
g. The Appendix showing a listing of drawback offices has been replaced by regional CBSA, Trade Compliance Division (TCD) offices in paragraph 23.
This memorandum has been revised in accordance with the Government of Canada’s Paper Burden Reduction Initiative. This memorandum supersedes and replaces D7-3-2, dated January 1, 1991.
In accordance with the above, the following changes where made:
a. Revisions include updates to legislative references, D memorandum, policy and procedures and reflect the new name of the Canada Border Services Agency (CBSA).
b. Paragraph 9, the K32-1, Drawback Claim, has been deleted from the listing of official forms and the requirement to file a K32, Drawback Claim, in duplicate has been removed.
c. The following documentation is no longer required to be submitted with the claim; copies of any invoices, a customs certified copy of Form E15, Certificate of Destruction/Exportation and
a list in triplicate of the import accounting documents.
d. Where Form K32A, Certificate of Importation, Sale or Transfer, or Form K32B, Drawback Certificate for Exportation, waivers are required to be presented, the requirement for presentation in duplicate has been removed.
e. The Exported Motor Vehicles Drawback Regulations has been replaced by paragraph 21.
f. Paragraph 22 provides a reference to Form K32, Drawback Claim, Form K32A, Certificate of Importation, Sale or Transfer and Form K32B, Drawback Certificate of Sale for Exportation.
g. The Appendix showing a listing of drawback offices has been replaced by regional CBSA, Trade Compliance Division (TCD) offices in paragraph 23.
Thursday, October 15, 2009
CBP Moving to Limit Substitution Drawback Claims
(World Trade Interactive)
U.S. Customs and Border Protection has issued a proposed rule designed to eliminate situations where imported merchandise subject to federal excise tax is effectively allowed into the U.S. 99% free of that tax through the application of a drawback claim. Comments on this rule are due by November 16.
According to CBP, the proposed amendments would preclude the filing of a substitution drawback claim for internal revenue excise tax paid on imported merchandise in situations where no excise tax was paid on the substituted merchandise or where the substituted merchandise is the subject of a different claim for refund or drawback of tax under any provision of the Internal Revenue Code. The proposal would continue to allow for the return of 99% of the duties, taxes and fees paid on the imported merchandise upon export, or when IRC taxes have been paid on substituted domestic product and the substituted merchandise is not the subject of a separate claim for refund or drawback of such taxes. CBP is also proposing to add a basic importation and entry bond condition to foster compliance with the amended drawback provision.
Read more here (with links to source documents).
U.S. Customs and Border Protection has issued a proposed rule designed to eliminate situations where imported merchandise subject to federal excise tax is effectively allowed into the U.S. 99% free of that tax through the application of a drawback claim. Comments on this rule are due by November 16.
According to CBP, the proposed amendments would preclude the filing of a substitution drawback claim for internal revenue excise tax paid on imported merchandise in situations where no excise tax was paid on the substituted merchandise or where the substituted merchandise is the subject of a different claim for refund or drawback of tax under any provision of the Internal Revenue Code. The proposal would continue to allow for the return of 99% of the duties, taxes and fees paid on the imported merchandise upon export, or when IRC taxes have been paid on substituted domestic product and the substituted merchandise is not the subject of a separate claim for refund or drawback of such taxes. CBP is also proposing to add a basic importation and entry bond condition to foster compliance with the amended drawback provision.
Read more here (with links to source documents).
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