Are You Paying Too Much? A Guide To Financial Consulting
|Author:||Ms Deborah Stern, BComm, CPA, CA|
|Profession:||Crowe Soberman LLP|
Business owners and operators all want to optimize their performance while saving on operating costs. As a professional who has advised companies from various industries over the years, I have observed many cost-saving opportunities for businesses of all sizes. In this article, I outline my observations and provide my top six recommendations in this area.
Duty and duty drawback
International trade regulations are complex and are continually changing. They often place a tremendous burden upon companies. For example, duty fees are a normal cost of doing business for manufacturers. Each year, manufacturers around the world pay millions of duty on imported goods that go to the government. Of these amounts, portions are available for a refund.
The duty drawback program allows importers and exporters to compete more effectively in export markets by permitting them, in certain cases, to recover duties paid on imported goods. More specifically, the program benefits those who import goods into the country, and then subsequently export the imported goods, subject to the conditions described below. This prevents the issue of double taxation, paying the duty when receiving the goods and then subsequently shipping the same goods to a country Canada has a treaty with.
To apply for the duty drawback program, the qualifiable goods must be:
Further processed; or Displayed or demonstrated in Canada; or Used for development of production in Canada of goods for subsequent export; or Exported without having been used in Canada for any purpose other than noted above. It is also very important when exporting your product to complete the paperwork properly and have the correct duty codes or you could be overpaying on duty. It is beneficial to periodically have a duty audit by a professional to review your paperwork and ensure you have coded all our product properly. Savings could be achieved without the upfront costs of a review because the consultant generally charges based on a percentage of the savings.
Beware of the significant changes in the last Federal Budget. The last Federal Budget removed duties on certain "sports equipment." The intent was to discourage cross-border shopping and encourage Canadian sales of like products.
However, a more important issue and one that will have a huge impact on businesses is the Federal Government's intent to remove the preferential status of certain countries (including China) as qualifying for the General Preferential...
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