What import and export taxes are there for USA and Canada? Will my customer orders be US orders when using a US fulfilment company?

Question

Hi there,

My company is based in the UK. I currently have a website that sells merchandise to customers worldwide. All our orders are currently fulfilled from the UK.

We’re looking to setup an additional site dedicated to selling to US & Canadian customers. We will be responsible for managing the site and the marketing, and we will be taking payment for orders. We are in talks to engage a US fulfilment company to warehouse, ship and provide customer service for orders.

– The US fulfilment company may also manufacture some of the items.
– Some of the items will be exported from here in the UK to their warehouse.
– Some products will be manufactured in China and delivered directly from China to their warehouse.

Expected turnover would be circa $1m per year.

I’d like to know:

– What import/export taxes would my company likely to be liable for when transferring goods to the US?

– As a UK company using a US fulfilment company, would my customer orders be treated as US orders and be subject to local and federal taxes? And should I be passing these on to customers.

– Would there be any import/export taxes to customers in Canada?

– Any other restrictions or tax liabilities I should be aware of with this setup.

Many thanks

Martyn

Answer

Hi Martyn,

I hope you’ll receive some useful answers to this shortly. In the meantime, this webinar on regulation and fulfilling your order might be useful.

http://opentoexport.com/article/pricing-regulation-fulfilling-your-first-order/

We’re also planning a webinar on taxes and customs in December so keep your eyes peeled for any invitations we’ll be sending to our community of users around then.

Best wishes,

William

Answer

Sir,

Thank you for your query of September 23rd regarding exports to North America.

As regards the issue of taxation, there are no export taxes. You’ll pay no duties/tax for exporting your goods from the UK either to USA or Canada. The importer will be liable for import duty/tax when the goods arrive in North America. To find out the extent of those charges you or your importer should contact the customs authorities in the country concerned.

Yours sincerely,
R White

HM Revenue & Customs
Customs, International Trade & Excise
Website: www.hmrc.gov.uk/contactus

Answer

Sir,

Thank you for your query of September 23rd regarding exports to North America.

As regards the issue of taxation, there are no export taxes. You’ll pay no duties/tax for exporting your goods from the UK either to USA or Canada. The importer will be liable for import duty/tax when the goods arrive in North America. To find out the extent of those charges you or your importer should contact the customs authorities in the country concerned.

Yours sincerely,
R White

HM Revenue & Customs
Customs, International Trade & Excise
Website: www.hmrc.gov.uk/contactus

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