Hypothetical. Buying from china

shugy

Say I find a decent supplier from China for say mattress. Start of low, say 5k a time for supplies. What do I need to do to get them into the country. What taxes will be deducted from my sales etc..

Is it as simple as buy them in china, shipped here, pay import tax then tax on the sales.

I've 5-15k to play about with and having a few wee brain waves to use it for extra profit.

RUDOLF289

shugy wrote: »

Say I find a decent supplier from China for say mattress. Start of low, say 5k a time for supplies. What do I need to do to get them into the country. What taxes will be deducted from my sales etc..

Is it as simple as buy them in china, shipped here, pay import tax then tax on the sales.

I've 5-15k to play about with and having a few wee brain waves to use it for extra profit.

Ok Shugy,

Here is my tuppencehapenny worth

Right in the first sentence is your biggest challenge. Finding a decent, reliable supplier that delivers the quality you have specified. I would recommend - especially if you want to make this a regular business with continuing supply - to take either one of two approaches ;

1. Identify potential suppliers and trave to China to visit the factories. I would strongly recommend that you are accompanied by at least an interpreter. English is not as widely spoken as you would think, certainly outside the main commercial centres like Shanghai, Beijing, Guangzhou, Shenzhen etc. I managed using the translation facility on the I-phone, but it was tedious ......

or

2. Work through a reputable sourcing agent to assist you in finding supplier(s) that can deliver the quality you require at a competitive price. Advantages of working through a sourcing agent ;
- They know the market
- They understand the business culture
- They speak the language
- They are a lot closer to the potential supplier (and you can not underestimate the advantage that gives, dealing with somebody on the supplier's doorstep or dealing with them from a "safe" distance (for the supplier) from this end.

on a 5K to 15K budget I would think option 2. will save you money and avoid some the pitfalls you may encounter with a DIY solution.

There will be - in all likelyhood - two taxes to contend with ;

a. Import duty
I would recommend to contact the Tariff Classification unit in Nenagh ;

Advice about the correct tariff classification of specific goods can be sought from the Classification Unit. While every effort is made to provide accurate advice on the tariff classification, this advice is not legally binding. It is recommended that if you want legal certainty on a tariff code you should apply for Binding Tariff Information

Contact Details - for tariff classification advice on specific goods

Telephone: 067 63370
LoCall: 1890 62 63 64
Fax: 067 32385
E-mail: tarclass@revenue.ie

They would give you the customs classification and the applicable rate of duty. Duty is calculated over the cost of the product plus the freight cost plus Marine Insurance.

b. Value Added Tax (VAT)
VAT is charged over the cost of the product, plus freight cost/marine insurance plus duty. The rate is likely to be 23% unless the matresses are of an orthopedic type, in which case they may be exempt from VAT.

NB : Both Duty and VAT are payable on presentation of the customs entry. It can be paid direct to Revenue or through the customs broker that acts on your behalf.

Also, if you are a VAT registered business, the VAT paid on import is a deductible input. You can claim it back / offset it against the VAT you charge on sales.

You are legally obliged to register for VAT if your turnover is € 75.000 per 12 month period or higher. If your turnover is less than € 75.000 per 12 month period you are not obliged to register for VAT. However in that case you have no mechanism to claim back the VAT on imports. It would be a good idea to take some advice from an accountant on this aspect.

When it comes to shipping your goods from China, there are 2 very important rules;

Rule number 1
Do not, under any circumstances leave the shipping arrangements to your supplier.

Rule number 2
DO NOT, UNDER ANY CIRCUMSTANCES LEAVE THE SHIPPING ARRANGMENTS TO YOUR SUPPLIER !

I strongly recommend to employ the services of an Irish based Freight Forwarder. They should be able to offer you a comprehensive service, including customs clearance on arrival in Ireland. More importantly they would be able to confirm ALL the costs involved in bringing your shipment in.

If you search the term : China Import Service Fee in this forum you will see quite a few posts of people that left the shipping arrangements with their Chinese supplier and were caught out on this side with very high costs.

Further things to consider ;

- Marine / Transport Insurance. Very important, often overlooked or ignored. All risks premiums run from aprox € 3.00 to € 5.00 per € 1000 value declared. Usual practice is to insure for cost of the goods plus freight cost plus 10%. So for a value of € 5000 insurance would set you back something like € 25.00 plus usually a documentation / policy fee of € 10.00 to € 15.00.

- EORI

If you import you need to register for EORI. Often that is done at the time you register for VAT. However, if you are not registered for EORI see below details.

In Ireland, E-Customs Branch, Corporate Affairs and Customs Division deal
with the allocation of EORI numbers. Requests for clarification/advice on EORI matters can be directed to them at the following contact numbers:
E-mail address: ecustoms@revenue.ie
AEP Helpdesk: 1890 204 304 (outside Ireland +353 67 63400)
Further information on EORI can be found on the Revenue website or the
European Commission website

I think the above will address some - hopefully most - of the issues you need to consider when importing. Feel free to post again or PM me if you need any further information / assistance

Cheers,
Rudolf289

SATNAV

Hi Shugy

Great advice above , I know you say hypothetical mattress from China , it's my understanding that it's cheaper to buy these with in the EU due to a number of restrictions regarding flame resistance etc, note any imports that have restrictions or special requirements under EU law must have a up todate cert of compliance for each shipment ( SGS or other official testing company ) with the goods these can cost between € 600/ € 1000 per report .

Make sure the test is current for your order not one the factory carry for all goods .

best of luck .