Deferred+payment

= **Deferred Duty/Tax Payment** =

**Definition/Scope**
Deferred duty/tax payment refers to the payment of duties and taxes for goods declared over a specified period, e.g. 14 days, after the release of the goods, in one amount by bank transfer or other non-cash payment method, to the Customs bank account or by withdrawal by Customs from the trader's Customs account.

**Problem statement**
Traditionally, persons declaring goods to Customs for import have to pay duties and taxes due for each individual import transaction. Depending on the volume of import declarations and the payment method, this can potentially increase the amount of bank charges, as these are charged not only on the amount but also per indivdual transaction. This additional cost and the administrative handling of each payment increases the cost of trading. Deferred duty/tax payment allows traders who have a significant volume of import declarations per month, in particular @authorized traders and Customs brokers, to increase the efficiency of payment handling and to reduce the bank charges associated with duty and tax payments.

Persons who act on behalf of the importer, e.g. a Customs broker, often also cover the duty and tax liability for the importer. The importer will later reimburse the broker for payment of the duties and taxes, but this is after the broker first paid the Customs. Deferred duty/tax payment would enable these people to recover the duties and taxes due from the importer in time for the payment to be made to Customs.

**Implementation guidance**
Standards 4.15 to 4.17 of the Revised Kyoto Convention (RKC), provide for deferred duty/tax payment and require Customs to make this procedure available without interest charges and for a period of a minimum of 14 days.

Customs should consider the introduction of a deferred duty/tax payment regime in the context of Customs automation developments, as deferred duty/tax payment in combination with Customs automation provides the possibility to centralize the payment process and to eliminate the need for a cashier at every Customs office. Consequently, deferred duty/tax payment removes this face-to-face encounter between Customs and traders, thus should be combined with @integrity efforts of Customs. Some administrations require a guarantee to secure the payment of duties and taxes.

**Additional information (references, examples, etc.)**
The ICC Customs Guideline # 15 provide supporting business rationale for deferred payment facilities.