Because IT equipment is considered a dual-use good that has both civilian and military applications, not only is the process and paperwork more complex, but there are also taxes added to the value of the item being shipped. For technology resellers who operate globally, a major concern is the value-added tax and the slow recovery process. The shipment of IT equipment across borders will likely be subject to heavy import taxes and the matter is complicated further when it is worth over hundreds of thousands of dollars. When shipping to the EU for example, value-added tax is often an additional cost, and this can amount to 25% the technology’s commercial value.
The key to recovering the taxes on your goods is partnering with a strong importer of record that can seamlessly import equipment to any country and that also includes tax recovery as part of their services. While the role of an importer of record is to see the shipment’s acceptance into the receiving country, and to take responsibility for it once it clears, there are companies like TecEx that go above and beyond for their clients. They offer full tax recovery (including sales tax and co-locations costs) as well as a value-added tax refund from 40 of the 136 countries with which they hold a point of presence; what’s more is they guarantee these taxes back in under 6 months. When 90% of total shipping costs are comprised of taxes, this can make a great deal of difference for medium-sized operations, allowing enterprises that otherwise wouldn’t have the opportunity to expand to become international contenders.
There are many other reasons to partner with a global distributor, including the best lead times available. TecEx ensures complete and compliant clearance of shipments irrespective of their size and cost in under 10 days. They also offer hands-on service, with their on-the-ground personnel liaising with the reseller’s preferred freight service or forwarder to ensure the shipment arrives where it should and when it should. Furthermore, clients can track their shipments in real time through a convenient online portal; here they may connect with their client services executive, expressing any questions or concerns they might have. Finally, this importer offers what is called a landed-cost quote, so despite any changes made to the receiving country’s customs rules and regulations, resellers are not hit with any surprise fees — even when dealing with dual-use goods. With the right IoR, the quote they’re given to start is what they pay.
Partnering with an importing service that offers tax back, including the recovery of value-added tax imposed on goods at each separate stage of distribution, can alleviate much of the financial burden associated with doing business overseas. It also gives you the opportunity to build international relationships, explore new leads, and grow your business. Cross-border IT transactions are complicated affairs, and leaving the clearance of your items to the professionals will save you time, energy, and money. It also allows companies to recover their VAT costs in a timely fashion, giving companies the resources to really expand their businesses and seek working relationships outside of their overly saturated local markets.