The Department of Immigration and Border Protection (DIBP) have announced changes to the calculation of Customs Values involving overseas freight and insurance amounts.
Two key areas for consideration are the Customs Valuation impacts and the base values declared for the GST calculation on importation, based on the Customs Value (FOB level generally), and adding overseas freight, insurance, Customs Duty and where appropriate any Wine Equalisation Tax (WET). This is known as the VoTI or Value of the Taxable Importation.
The key driver of the DIBP Notice Number 2016/33, has been the additional option provided in the Tax and Superannuation Laws Amendment (2016 Measures No.1) Act 2016 (the amending Act), which received Royal Assent on 5 May 2016.
Via this amendment, effective from 1 October 2016, overseas Free On Board (FOB) contracts will have an option of applying a 10% uplift factor to allow for freight and insurance whereby the actual amount is not known at the time of importation. If the actual freight and insurance amounts become known after the 10% uplift factor has been utilised, DIBP have stated that the import declaration will not require amendment.
When considering the actual Customs Value impact, the notice states that the owner, or their authorised agent/broker, have the ability to estimate freight and insurance where the amounts are not known at the time of importation, provided such estimates are soundly based and can therefore be used to effect customs clearance. The notice also states that once the actual amounts become known and the difference is material, the import declaration has to be amended accordingly.
For further information, please refer to the notice at:-
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