We recently received a complaint about an item we sold to Mexico. It was returned to the UK under a warranty repair agreement. We repaired the item and sent the product back on a “proforma” invoice. We were invoicing our customer nothing, however, when shipping goods — we have been previously told to put the full value cost of the item on a proforma invoice, including the original invoice number, date, etc and confirming that the product was repaired, so that customs have the details. It appears our customer in Mexico was charged a second amount of tax and they now want to pass these costs onto us.
- Do we have to put the full original value?
- How do we avoid incurring tax costs again?
With regard to your questions, you do need to show the true value of the item on the shipping paperwork, however it shouldn’t be shown in the value column but instead as a statement in the main area of the invoice. You should also state on the invoice that this value is for insurance purposes only and that the invoice is non-chargeable and for free-of-charge repair (or use the words “warranty repair”). I’m not happy that the Mexican company is asking you to pay the duties — they either exported the shipment incorrectly (they should have sent it as a temporary export so the repair could go back in duty waived) or, if they did that wrong, they can reclaim the customs duty on the first import so they only pay it once. Also, I noticed from your invoice that you actually make a preference statement that the goods meet the preferential origin rules for trade between the EU and Mexico. If that is the case then your Mexican customer shouldn’t be paying any import duty anyway. I think you need to go back to your customer and ask for more information, including a copy of their import entry before feeling that you have done anything wrong (that warrants you paying their import duty).
Source – Croners Wolters Kluwer Business
For more information please contact Stephanie Warrington on [email protected]