Questions and Answers for Foreign Goods Importers in the United States
In the vast world of international trade, understanding the intricacies of importing goods into the United States can be a daunting task for foreign companies. This article aims to simplify the process and provide a clear overview of the key steps and regulations involved.
First and foremost, to import goods into the US, a foreign company needs an 'importer number.' This number, typically the company's Employer Identification Number (EIN) issued by the IRS, serves as the importer number recognized by the US Customs and Border Protection (CBP) for customs clearance.
For foreign entities without a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), the process is slightly different. They can obtain an EIN by mailing or faxing Form SS-4, specifically prepared for entities without an SSN or ITIN, and filling line 7b correctly to indicate they do not have a US taxpayer identification number.
Once the EIN is obtained, the foreign company can use it when filing CBP Form 7501 (Entry Summary) and other customs documents required for importing into the US. It's also worth noting that often, foreign importers work with customs brokers or agents residing in the US who can help handle filings and compliance without the importer needing to establish a US legal entity.
Another crucial aspect is the appraisal of imported merchandise. Customs are required to utilize six methods, with the transaction value being the predominant method for most imports. However, the request to use the computed value method must be made at the time the entry summary for the merchandise is filed with the port director.
The computed value method includes the cost or value of materials, fabrication and other processing, profit and general expenses, any assist, and packing costs. If there is no identical merchandise, but there is something sufficiently similar, the customs will use the value of those similar goods.
If all other methods fail, customs will deem a reasonable value for the imported merchandise. The deductive value method, on the other hand, allows you to deduct certain costs and reasonable profit from the price.
It's essential to note that if you purchased the goods from a manufacturer, the purchase price will be the basis of the appraisal of your shipment. If you got the goods from a middleman, you can use the "First Sale" rule to cut out the middleman and their markup and use the manufacturer's price as your basis.
Foreign businesses are allowed to import consumer products into the US via a 3PL warehouse in the US. However, if you did not buy your goods from a third party, the CBP will use the price of the same goods as the basis for appraisal.
Lastly, it's important to remember that the fact of import by itself does not change ownership. Furthermore, normally, you don't have to pay sales tax at the time of entry of goods into the US. Customers pay sales tax after the price of the product.
In conclusion, the critical step for a foreign company without a US presence or SSN is to acquire an EIN by mailing or faxing Form SS-4 with the special instructions for foreign entities; that EIN then functions as the importer number recognized by CBP for import clearance. Understanding these steps and regulations will help foreign companies navigate the process of importing goods into the US more smoothly.
- Acquiring an EIN, which serves as the importer number, is the first step for foreign companies without a US presence or an SSN to import goods into the United States.
- Foreign businesses importing consumer products into the US via a 3PL warehouse should be aware that the price of the same goods will be the basis for the appraisal of their shipment by the CBP.
