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This UK tax strategy is applicable to all FedEx companies and branches with a tax presence in the UK.
This strategy is published for the year ended 31 May 2018 in compliance with the requirements of Finance Act 2016, Schedule 19 paragraph 16(2). This strategy remains in effect until superseded by publication of a UK tax strategy for a subsequent period.
The Comprehensive Economic and Trade Agreement (CETA) between the European Union (EU) and Canada provisionally entered into force on 21 September 2017. It eliminates approximately 98% of all import duties1 between the two regions and opens up big opportunities for businesses by making it easier to import and export goods and services.
Key benefits for your business
- The agreement makes it cheaper for EU businesses to trade in Canada (and of course for Canadian businesses to trade here) by cutting the duties companies have to pay at customs.
- It could also mean new trading partners, investment opportunities as well as easier access to materials and parts for your products and much more.
To benefit from a 0% import duty rate, the products imported into Canada need to be of EU origin (likewise, of Canadian origin for products imported into the EU). It is important to note that certificates of origin will not be issued by the customs authorities and the EUR1 form cannot be used as proof of origin. Proof of origin is now based on a declaration and not a formal certificate.
As an exporter, you will have to write a statement of origin on your commercial invoice - or any other commercial document - along with a complete description of your products. The originating products will then benefit from CETA on the basis of the origin declaration.
Please note that for shipments valued over 6,000 EUR, you will have to indicate your Registered Exporter system Number (also known as a REX number) with your Statement of Origin. If you do not currently have a REX number, you will need to become registered using the REX system before proceeding.
To view a sample statement of origin or learn more on REX Registration, please visit our CETA page.
How FedEx can help
At FedEx, we can help your business reach its potential on the global stage. When it comes to exporting to Canada, we offer shipping services with customs-cleared, door-to-door deliveries from the EU to Canada in just 1-3 business days2.
Please contact FedEx if you are considering doing business with Canada.
1 Some agricultural products will remain restricted, and duties on some other products will be eliminated through a tariff phase-out over the next few years.
2 Transit times and delivery service may vary depending on destination and origin. Please contact Customer Service on 03456 07 08 09 to validate service availability depending on your zipcode.
FedEx Express is making the following changes to our Dangerous Goods (DG) shipping policy. This independent initiative anticipates prospective regulatory changes in response to growing concerns about the safe handling of bulk or standalone shipments of lithium batteries.
As of January 1st, 2017 FedEx Express customers sending bulk shipments of lithium batteries (United Nations (UN) number 3090 & United Nations (UN) number 3480) can only do so by treating all such shipments as fully regulated Dangerous Goods (DG) commodities.
This initiative also helps us increase the visibility of lithium battery types throughout our network and ensure the integrity of such DG shipments until their final destinations.
How does this initiative change bulk lithium battery shipments?
With effect from January 1st, 2017, FedEx Express customers shipping UN 3090 & UN 3480 shipments must carry out the following steps:
- Add a Shipper's Declaration for Dangerous Goods which can only be completed by DG-trained personnel.
- Include the United Nations (UN) number on the Lithium Battery Mark (IATA Figure 7.1.C), which you can use as of January 1st, 2017. However, if you would like to use up your pre-labeled packaging or labeling you have in stock with the Lithium Battery Label (IATA Figure 7.4.H), you may continue to do so until December 31st, 2018, after which the Lithium Battery Mark becomes mandatory.
Note: if using the Lithium Battery Label, FedEx requests that you add the UN number on the package adjacent to this label [FX-05]. This will become a mandatory requirement by FedEx on July 1st, 2017.
Lithium Battery Mark
(valid as of January 1st, 2017)
Lithium Battery Label
(valid till December 31st, 2018)
* Place for UN number(s)
** Place for telephone number for additional information
In addition, although this new rule does not apply to individual lithium batteries packed with or contained in equipment (UN3091 and UN3481 as defined in Section II), you will need to follow the same instructions as explained above regarding the inclusion of the Lithium Battery Mark or the Lithium Battery Label.
- Add a Class 9 Lithium Battery Label and Cargo Aircraft Only label to each shipment
- Review all lithium battery shipment packing to ensure it meets IATA packing instructions UN 3480 - PI965 & UN 3090 - PI968.
Note that a Dangerous Goods handling surcharge might apply to shipments containing such lithium batteries.
Where can you find more information?
- Contact your FedEx Express Customer Services and ask for the Dangerous Goods Specialist
- Read about the new FedEx Express Lithium Battery Policy Change in the IATA Dangerous Goods Regulations Manual available for purchase at www.iata.org. This also carries information on lithium battery packing, marking, labelling & documentation.
With effect from 1st May 2016 the Union Customs Code (UCC) becomes the applicable customs law within all twenty-eight member states of the European Union (EU).
Its introduction will have a very significant impact on the way in which goods are imported, exported, cleared and forwarded. It is therefore very important that you make sure you are fully aware of all the new provisions of the UCC.
Here’s a brief summary we’ve prepared to help you get to grips with the key changes to customs regulations and procedures as they now affect you:
- the customs authorities in each member state are required to re-assess all existing customs related authorisations between 1st May 2016 and 1st May 2019 at the latest;
- Inward Processing Relief (IPR) and Processing under Customs Control (PCC) licenses will be merged into one scheme, the IPR Suspension;
- a new definition of exporter is now provided. NB all exporters must either be officially established and registered within the EU or else be represented by an officially appointed fiscal representative;
- each individual customs authority is now obliged to collect all duty amounts, including those for goods valued at less than 10 EUR (a practice currently not yet the case in all EU countries);
- a Safety and Security Entry Summary Declaration (ENS) is scheduled to be introduced in 2020 for all values of goods with the exception of items of correspondence;
- a 6-digit harmonised code for every commodity will also be required to be entered on each ENS in 2020.
What do you need to do differently?
- a Binding Tariff Information (BTI) reference number must be quoted on all customs declarations required for eligible products. Note that the BTI period of validity is reduced to three years;
- when determining the customs base for the calculation of duty and taxes on any relevant product, the value of the last sale before entering the EU must be taken;
- when applicable, royalties and license fees must be included in the customs value;
- the Value Declaration (DV1) requirement will be automated and will only be required for values above 20,000 EUR.
It should be noted that several of the above requirements are dependent on changes to national customs systems and procedures. We therefore strongly advise you to regularly check individual country’s customs websites for exact implementation dates and related documentation requirements.*
In the meantime you can be sure that FedEx will provide updates and make the introduction of all these new requirements as straightforward and simple as possible for you.
Q: What will change as of 1st of May 2016 in the way FedEx is doing customs clearance on our behalf?
A: There will be no difference in the way we perform customs clearance. There might however be changes on a later date.
Q: Do we have to provide you with new or specific information upfront?
A: The Binding Tariff Information (BTI) reference number now becomes mandatory. You will have to provide FedEx with your BTI reference number in order to guarantee you are granted to use the approved tariff code for that customs declaration.
Q: How long is the Binding Tariff Information (BTI) reference number valid for?
A: A BTI is only valid for 3 years. You have to keep track of this date and ensure you file a new request on time to ensure continuation of the BTI process.
Q: How is the customs base determined for calculating the duty and taxes?
A: It is the value of the last sale before entering the EU that must be taken into account.
Q: How does the new way of calculating the duty and taxes impact indirect selling or chain selling activities?
A: If your shipment travels outside the EU before being shipped to its final destination in the EU, the valuation of its goods is changing.
For example, if a Chinese company sells goods to a company in Dubai that immediately sells them to an EU consignee, it’s the consignee’s order that triggers the moving of the goods out of China. The value of the goods to use on the EU customs entry declaration is the price agreed between the Dubai seller and EU buyer. For customs clearance purposes the commercial invoice of the Dubai seller and EU buyer is needed.
Q: What about royalties and license fees?
A: If your buyer pays you royalties or license fees, you should either list them separately on the invoice with their price or make it clear that they are included in the overall price.
Q: What is happening with duty amounts below 10 EUR?
A: Customs authorities now have the obligation to collect all duty amounts regardless of value meaning you could see your overall duty/tax invoice amount increasing if you have such shipments.
Q: Are there any changes to the information I should put on the invoice?
A: You still have to include a detailed description of the goods. By 2020, in addition to that, a 6 digits harmonized code per product category should be given as this will be required on the safety and security entry summary declaration (ENS). The code is common in all the countries member of the World Customs Organization (WCO).
Q: Are shipments with a value below 22 EUR impacted by the UCC?
A: You could occasionally experience a customs delay on those shipments as Customs authorities might also stop shipments within this category to perform additional checks for safety and security purposes. However, there is no immediate impact expected.
Q: What else should I know as an exporter?
A: The definition of an exporter now changes. The exporter needs to be established in the EU or to have appointed a fiscal representative in the EU. If you are a customer involved in triangle exports, you are impacted and need to check if your setup is in line with the new legal requirements. FedEx advises you to contact your accountant or legal consultant for help if you are unsure about your legal setup in the EU.
Q: Is a DV1 (value declaration) still required?
A: The DV1 will be automated and only necessary for values above 20,000 EUR. This is however not yet a fact as of May 1, 2016 and is depending upon systems changes in the individual Member States of the EU.
Q: Is the de minimis (goods value under which no duty is due) changing?
A: No, it remains at 150 EUR for duty.
Q: Any influence on Authorised Economic Operators (AEO)?
A: If you aren’t AEO certified yet, a new criteria is added to obtain the customs simplifications certification. You have to prove the professional qualifications of your customs clearance staff either by demonstrating they have 3 years’ work experience, showing training records or proving you are holder of an official degree.
Q: Will anything change to my Inward Processing Relief (IPR) or PCC (Processing under Customs Control) license?
A: Yes. IPR and PCC will merge into one scheme. The IPR drawback scheme will be abolished and compensatory interest will no longer be due, leaving IPR suspension as the only scheme possible.
FedEx is committed to protecting the security and integrity of our network.
While there is no foolproof method to prevent the respected FedEx name from being used in spam emails or potential scams, we are constantly monitoring for such activity and work cooperatively with law enforcement agencies around the world.
We urge customers to be suspicious of any request not coming directly from a FedEx employee or domain name, especially if it contains an attachment which the customer is asked to open.
Customers should not hesitate to contact us if they have questions regarding the legitimacy of an email soliciting payment in advance or requests to provide additional or personal information.