The significant volume of international trade in goods, both inbound and outbound, through Australia’s ports presents many challenges for the Australian Customs and Border Protection Service (‘Customs’), chief amongst these include increasingly complex supply chains, perceived unfair overseas competition to Australian industry, supply chain security, trade liberalisation and technology.
The result is a continually changing landscape of rules and regulations governing Australia’s imports and exports. In recent times new measures have been introduced which:
Against this backdrop, Customs has recently been provided increased funding dedicated to compliance activities and an increase in penalty unit costs. This provides clear evidence that Australian importers and exporters are facing a new international trading environment.
The general rate of customs duty in Australia is 5% (with the exception of apparel and excisable goods which attract a higher rate), however in cases where goods are not available from Australian production or are not destined for the Australian market a wide variety of customs duty concessions and suspension schemes may be available.
Australia has negotiated a wide network of bi and multi-lateral Free Trade Agreements (FTAs). These agreements offer Australian importers and exporters customs duty savings and preferential treatment for their goods in/from countries throughout Asia and the Pacific. Further, Australia has a strong pipeline of FTAs currently in negotiation and has a policy of advancing FTAs which make economic sense to Australia.
When advising clients on cross border transactions, a closer examination of the issues usually highlights the true complexities of the policies and laws. Our advisers can share their experience and knowledge, not only with the customs issues at hand, but with the broader opportunities which often go unnoticed.
The PwC Australia International Trade & Excise team offers access to the largest team of dedicated professionals in the areas of customs, excise and trade advisory within Australia. We work with organisations ranging from SMEs to major multinationals to minimise duty costs, initiate supply chain improvements, assist with dispute settlements, liaise with the various authorities and trade policy agencies, and respond to compliance needs with creative strategies and solutions in order to reduce compliance costs.
We deliver positive results for our clients, which include:
In addition to our standard services available across the region, specific services in Australia include:
Customs Duty Planning Advice
Risk Management
Optimise Free Trade Agreements
Australian Industry Assistance
The Australian team recently assisted an importer and distributor of motor vehicles reduce the landed cost of vehicles into Australia by employing WTO-based customs valuation rules to enable “price unbundling”.
How we helped
The project involved the identification and substantiation of a number of intangible costs that were embedded in the price of vehicles and which could be effectively removed from their customs value on importation into Australia.
Benefit for the client
A five year binding ruling was then secured from the Australian Customs and Border Protection Service to ensure technical sign-off on the issue, the outcome for the client is a recurring customs duty savings of approximately AUD 5 million per annum.
The Australian team has recently had great success in assisting a number of our clients in obtaining significant refunds of fuel tax paid in respect of historic fuel used in heavy on-road vehicles.
How we helped
The opportunity arose from a recent court case that found that fuel used in equipment operating on board heavy vehicles is eligible for a full rebate of fuel tax, instead of the partial rebate available for road transport activities, as had been the previous position of the Australian Taxation Office. The opportunity extends to refrigerated trucks, cement trucks, waste collection vehicles, vacuum collection and excavation trucks and air-conditioned buses.
Benefit for the client
Utilising methodologies developed by PwC Australia, our clients were able to go back four years to secure millions of dollars in fuel tax refunds from the Australian Taxation Office, as well as significant additional savings going forward.
The Australian team recently assisted a mining company in reducing its customs duty liability on imported capital equipment for a new 'greenfield' mine.
How we helped
The assignment involved providing the client with an end to -end -solution involving identification of the most effective customs duty minimisation strategy, demonstrating non-availability of the imported equipment from Australian production and realisation of the benefit as the goods were imported into Australia.
Benefit for the client
This resulted in a customs duty saving of AUD 4 million. Based on our experience, the minimisation of customs duty on imported goods for a major project can result in overall duty savings to a project of up to 1% of capital costs, as this current assignment demonstrated.