You may have heard about the new EU tariffs associated with imports from the USA? Having come into force on the 22nd June 2018 there is a lot of confusion around what this means for the marine industry. Over the last few days our team have been contacted by a number of EU and US dealers seeking clarification of the new regulations.
As a member of British Marine and an active party in opposing elements of the regulations; our inhouse Customs & VAT expert Simon Beck helps us set the record straight with our FAQ guide to the new tariffs explaining exactly what they mean for customers and the marine industry in general.
Peters & May’s Simon Beck, working in conjunction with British Marine, won the battle to oppose the enforced tariffs on imports already in transit prior to the regulations coming into place. Both parties strongly opposed the proposed solution of importers claiming back these tariffs. As a result of the pressure applied by Simon and British Marine we can now confirm that boats imported from the US still in transit, with despatch prior to the enforcement date, will be exempt from the 25% tariffs. This has already saved Peters & May’s customers hundreds of thousands of pounds.
With so many questions around this topic, let’s get some answers…
Q: Do the tariffs apply to all boats?
A: The only boats not included are ‘inflatable boats’.
Q: What are the new tariffs?
A: An additional duty of 25% is being applied to the CIF value of the boat. This is over and above any duty currently charged. NB – in the EU VAT is charged on the (CIF + Duty) value of the boat.
Q: Do the tariffs apply to second hand boats?
A: Yes, if the boat is of US origin.
Q: Do the tariffs apply to outboard powered boats?
A: Yes, they apply to all boats except ‘inflatable boats’.
Q: I can’t find the US HS code for outboard boats in the EU list. Why is that?
A: The Harmonised Tariff Schedule is only harmonised to the first six digits. The US tariff 8903 9920 equates to EU tariffs 89039910, 89039991 & 89039999.
Q: If I ship my boat without an inboard engine can I classify the hull in chapter 8906 & pay a lower rate of duty?
A: You can only classify an unassembled or disassembled boat in chapter 8906 if it DOES NOT have the essential character of a vessel of a particular kind.
Q: I buy outboard powered boats as a package from the US. Do I have to pay the additional duty on the whole package?
A: If the outboard is invoiced separately then it can be declared as a separate item at import. Duty rates on outboard engines range from 4.2% to 6.2% depending on power output.
Q: If I ship my boat to a non-EU country and pay the taxes there, then ship it into the EU, will I still have to pay the new tariff?
A: The new tariff applies to US origin boats as opposed to boats exported from the US. It is unlikely that using this method would meet the criteria required for a change of origin to be allowed.
This list is not exhaustive and is based on our understanding of the current situation. If you have further questions, please feel free to contact our customs manager.
These new regulations are set to have a major impact on the marine industry, especially smaller businesses. Peters & May as a global leader in providing bespoke logistics often work with US manufacturers exporting yachts to the EU. As a result of these new regulations, our team are seeing the impact as Simon explains; “as we ship the majority of small boats ex USA to Europe the new regulations have already had a negative impact on our business. We have already had over 40 cancellations as EU dealers place orders for new boats on hold.”
During this period of uncertainty; Simon will be working closely with Peters & May’s clients to advise and make Customs & VAT recommendations based upon the new tariffs. We caught up with some customers of Simon’s to gain their thoughts on the current situation. Michael Hardicker, Managing Director of MasterCraft Boats UK offered his comments: ‘Peters and May have been our shipping partner since we became the UK MasterCraft Distributor back in 2007. During this time, we have seen significant change in many areas but have also found Peters & May to be accommodating and informative around changing situations. In particular recently with the introduction of the increase in duty to the EU, Peters & May have worked to provide us a workable solution for goods in transit ensuring our exposure is kept to a minimum in what can only be described as a challenging situation!’.
Although futures are unsure, it is the mission of Peters & May alongside British Marine to keep people updated. With the impending exit of the UK from the EU tariffs may again change, but for now at least, hopefully, Peters & May are able to shed some clarity on the recent situation.
If you have further questions, contact our team.