What makes up the total charge when goods enter the US?
Duty plus processing fees, all of them assessed on a declared customs value. The MPF is charged on entries alongside the duty, so the total that arrives is not simply a duty rate applied to your invoice. Two things follow from that. First, the declared value drives everything, which is why valuation deserves as much attention as the duty rate. Second, the broker invoice needs to be broken into its components before it is posted, because they behave differently in your accounts and in any later correction. Ask for the entry summary rather than just the amount payable, and reconcile to it.
Does the price I charge my US subsidiary matter to customs?
Very much. The declared customs value has to be consistent with the transfer price used for income tax, and the two are looked at by different authorities who can each ask about the other. A price set for one purpose without reference to the other is the standard way a group ends up defending two inconsistent positions on the same shipments. So the intercompany price, the income tax documentation supporting it, and the value declared on entry should be one decision with one file behind it. Where they already differ, establishing the extent of the difference is the first piece of work, before anything is filed.
What happens at customs if we make a year end transfer pricing adjustment?
A retroactive adjustment changes the price of goods that have already been imported and declared, so it can require customs corrections as well as an income tax entry. That is why the two are coordinated rather than handled by separate teams in separate months. Practically, decide before the adjustment is booked how it maps to entries: which shipments it relates to, in which period, and whether the movement is upward or downward. Then the correction can be filed on a basis you can explain. Groups that book the adjustment first and think about the border afterwards usually find the shipment-level allocation is no longer reconstructable.
Who is liable if the classification turns out to be wrong?
The importer of record carries the liability. A broker prepares and files the entry, and a supplier may suggest a classification, but responsibility for what was declared sits with the importer and not with either of them. That has a consequence for how classification decisions ought to be made: if the importer owns the exposure, the importer should own the position and the reasoning behind it, in writing, rather than inheriting a code from whoever set one up originally. Classification determines the duty rate, so the amount at stake is the whole difference between two codes across every shipment in the period.
Does classification or valuation decide my duty bill?
Both, at different points. Classification determines the rate that applies to the goods and valuation determines the base that rate is applied to, so an error in either produces the same symptom — a total that is wrong — with completely different work behind fixing it. Keep them as separate questions when you examine a duty position. Take the classification of each product line and the reasoning for it, then take how the declared value is built, including what is added to or excluded from the invoice price. Groups importing from related suppliers usually find the real question sits on the valuation side.
Should my US customer be the importer of record instead of us?
It depends on what you want to control, and the trade is fairly clear. If your customer imports, the liability for the declaration — classification, value, and anything later found wrong with either — sits with them, and so does the clearance work. If you import, you control the process and can offer a cleared delivered price, but you take that liability on and you are the party a correction gets filed by. For a group shipping to its own US arm the question is usually settled by where the valuation file lives. Whatever is decided, the shipping terms and the broker instructions should say the same thing.
I work remotely from another country for a company back home — who taxes me?
Usually the country you are physically in, because employment income is generally sourced where the work is done, with your residence country taxing it as well if you are resident there and giving credit. Three things follow: your employer may acquire withholding and social security obligations where you sit, a treaty tie-breaker may be needed if both countries call you resident, and a short trip that becomes a long stay can cross a residence threshold nobody was watching. See remote workers and digital nomads.
What is double tax relief and how is it given?
Three mechanisms, and which one you get depends on your residence country's law and the treaty. Exemption leaves the foreign income out of the residence-country base. Credit taxes it and then subtracts the foreign tax, capped at the residence-country tax on that income. Deduction merely reduces taxable income by the foreign tax, and is usually the weakest. Canada and the United States lead with credit; several treaties give exemption for specific income types. See claiming the credit.
