Unraveling the Laws of Import and Taxation: what is changing?

Import and taxation laws are essential elements for the functioning of a globalized economy. International trade drives economic growth and the diversity of products available on the market, but it also requires adequate regulation to ensure fairness and the protection of national interests.

In this article, we will dive into import and taxation laws, analyzing the significant changes that have occurred recently and their impact on the international landscape.

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Author: Gustavo Tenório Campos Semaan

The Importance of Import and Taxation Laws

Import and taxation laws play a crucial role in controlling the flow of goods and protecting local producers and consumers. 

They help establish tariffs and measures to regulate the entry of foreign products into the country, as well as ensure that imported goods comply with the norms and quality standards set by the authorities.

In addition, import laws have a significant impact on a nation’s trade balance. The imbalance between exports and imports can influence the country’s economic growth, employment, and competitiveness in the international scenario.

The operation of Import and Taxation Laws

Import and taxation laws vary from country to country, but usually involve some common procedures and principles.  First, the importer must declare all relevant details about the good to be imported, including its origin, value, tariff classification, and purpose.

Based on this information, the customs authorities will determine the rate of taxes and duties that will be levied on the import. 

In some cases, ad valorem tariffs, which are calculated based on the value of the goods, or specific tariffs, which are fixed for a particular product, may apply.

What has changed in Import and Taxation Laws in 2023?

The year 2023 brought significant changes in import and taxation laws in several countries, reflecting the evolution of the global scenario and the need to adapt to economic and commercial demands. Some main changes were as follows:

• Trade Agreements and Economic Blocs: In 2023, there was an intensification in the signing of trade agreements and the consolidation of economic blocs between nations. These agreements aim to facilitate trade and reduce tariff and non-tariff barriers between member countries; 
• Increased Tariffs for Environmental Reasons: One of the most striking changes in 2023 was the increase in import tariffs for products with a high environmental impact. With growing global concern about sustainability and the environment, some countries have chosen to tax products whose production or use causes damage to the ecosystem. This measure aims to encourage more sustainable and responsible business practices;
• Changes in Rules of Origin: The rules of origin, which determine the provenance of products for taxation purposes and framing in trade agreements, have also changed in 2023. Countries have adjusted their rules to ensure the correct application of preferential tariffs in trade agreements, avoiding undue manipulation of declared origins to gain trade advantages;
• Retaliatory Policies and Trade Disputes: Trade disputes between countries continued to be a reality in 2023, leading to retaliatory policies with the application of punitive tariffs. These actions can create uncertainties in international trade and affect trade relations between the countries involved;
• Digitalization and Debureaucratization of Customs: With technological advancement, many countries have sought to improve their customs systems through the digitization and debureaucratization of processes. This allowed greater efficiency in the management of imports, reducing the time of customs clearance and the costs associated with foreign trade operations.

The impact of changes in Import And Taxation Laws

Changes in import and taxation laws have significant consequences for the economy and for companies operating in international trade. Trade openness can stimulate competitiveness and access to more varied products, but it also requires companies to adapt to foreign competition.

On the other hand, retaliatory policies and trade disputes can create uncertainties and challenges for exporters, negatively affecting business and the economy of both sides involved.

Changes in Taxation Rules for Online Purchase

The year 2023 marked a period of significant changes in taxation rules for online shopping, especially on popular platforms like Shopee and Shein. 

With the exponential growth of e-commerce, governments around the world have sought to update their tax policies to keep up with this evolution and ensure tax fairness in the digital environment.

One of the main changes was the improvement of the monitoring systems of international purchases made through Shopee, Shein, and other e-commerce platforms. 

With the increase in cross-border transactions, tax authorities began to intensify enforcement to ensure that all imports were properly declared and subject to applicable duties and taxes.

And in2023, rules of origin have gained even more importance in the context of online shopping. Countries have revised their trade agreements and rules to determine the provenance of products purchased through these platforms. 

The correct application of preferential tariffs in trade agreements was a point of attention to avoid tax evasion practices.

Value Added Taxes (VAT) and Rates:

Taxation on products purchased on platforms such as Shopee and Shein has also been subject to changes in 2023. Some countries have implemented or adjusted the Value Added Tax (VAT) applied to online purchases. In addition, tax rates on certain products, such as electronics and luxury goods, have been revised to ensure fairer and more equitable taxation.

Responsibility of Platforms and Sellers:

Another important change was the definition of responsibilities of e-commerce platforms and sellers who operate on these platforms in relation to tax compliance. 

Governments began to demand greater cooperation and transparency from companies to combat tax evasion and ensure the proper collection of taxes due.

Changes to Exemption Limits:

In some countries, exemption limits for online purchases were also changed in 2023. This means that purchases of value below a certain amount would be exempt from import taxes. 

However, it’s significant to note that these limits may vary from country to country and be subject to change over time.

In short, changes to taxation rules for online purchases such as Shopee, Shein, and other platforms in 2023 reflected governments’ effort to adapt to the ever-growing e-commerce environment. 

These changes seek to ensure fair taxation, promote fair competition between local and foreign companies, and protect the tax interests of each country in the global e-commerce scenario.