Are you an importer or exporter with more than 50 transactions each year?

Empty road and containers in harbor at sunset

Import and/or export trade reviews

In today’s financial environment, cost minimisation is a key driver in the logistical cost structure of each good’s cost of goods calculation. Costs associated with the importation of goods are variable, not fixed. It is therefore essential that such variable costs are minimised. Additionally, administrative penalties arising from compliance errors (e.g. Australian Border Force (ABF) – previously Customs, Department of Agriculture and the ATO) can impact on product costs long after the relevant goods have been imported and on-sold.

The Prosperity Advisers customs and trade review service offering, in conjunction with Trade Consultants, is relevant for any importer or exporter with more than 50 transactions each year. Whether you pay import duty or not, cost and charge savings are able to be identified when there are sufficient transactions each year.

We can help your business save on cross border regulatory costs, customs duty and other related taxes, identify and mitigate risks, and develop a compliance framework for the future.

Our approach

We use a multi-phased approach to border compliance. You can achieve significant cost savings with limited input.

Phase One – To determine whether there are sufficient opportunities to proceed to our savings and risk review, we typically undertake a high level review so we can quickly identify potential target areas for a more detailed savings and risk review. This involves only a visual examination of a previous import/export activity period (up to four years) and reporting back to you on what we see.

Phase Two – Once it is determined that a detailed savings and risk review is warranted, we analyse the data that you (or your customs broker) have declared to the ABF at the time of import or export over the previous four years. We typically review all the key factors that affect the customs duty and GST payments made by your business, including:

  • Tariff classification of your imported or exported goods
  • Use of import customs duty concessions (e.g. TCOs or the Enhanced Project By-law Scheme)
  • Use of export incentives and concessions (e.g. duty drawback or Tradex schemes)
  • Customs valuation, particularly for multinational companies and branded goods
  • The correct identification of the country of origin and use of preferences including Free Trade Agreements
  • Purchase and/or sales contracts

Phase Three – We review your purchase/order cycle, including relevant purchase orders and documentation relating to the physical receipt of goods into store. From such a review, we are better able to provide you with systems improvement advice.

Recent results

For a client in the furnishing industry, more than AU$184,000 was identified in overpaid GST plus more than AU$25,000 in overpaid customs duty. Demurrage charges and excess freight
charges were also identified requiring amended systems controls.

For another importer in the trucking spare parts and components industry, more than AU$1 million in overpaid GST was identified plus AU$15,000 in overpaid customs duty. Demurrage charges and excess freight charges were also identified requiring amended systems controls. Significant savings from using a different supply chain function are
currently being negotiated.

Another client was found to be using more than thirty different customs brokers to make binding declarations to Customs. Over 30% of the client’s importations did not gain release from Customs and Agriculture within a normal processing time, potentially incurring material additional storage charges. The client had insufficient documentation available at the time of clearance to allow proper declarations to be made. It purchased over 30% of its importations from related overseas companies, none of which were declared to Customs as
related, thereby potentially exposing it to multiple repetitive penalties. The client was unaware of any of these exposures to administrative penalties and imbedded costs.

Fees

We are offering “Phase one” at no cost. It is simple to commence “Phase one” – you will only need to provide us with a signed letter of authorisation to the ABF for us to start our review.

Before undertaking “Phase two” and “Phase three”, we will provide and agree a fee quote with you.

Contact your adviser for more information.

About Paul Glover

Paul is the Director of Taxation Services in Prosperity’s Sydney office. He has over 27 years of experience in providing Australian and international corporate taxation services within the Big Four and the mid tier, including 5 years in London. Prior to joining Prosperity, Paul was a Partner at a mid tier accounting firm and had previously spent six years at EY, where his roles included leading the Private Clients Group. He also led the EY NSW China Business group. Prior to that, Paul was an international corporate tax partner at Deloitte. Paul has advised Australian and foreign clients on Australian corporate tax and international tax issues, including transfer pricing. He has also advised a number of private business clients on issues such as the CGT small business concessions, employee equity, family trusts and Division 7A. Paul’s experience crosses many industries including utilities, media, property, financial services, professional services, mining, tourism and consumer products and his client portfolio has included many inbound and outbound businesses.

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