What Is An FTZ? - ABS Consulting
What Is An FTZ? - ABS Consulting
What Is An FTZ? - ABS Consulting
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<strong>What</strong> <strong>Is</strong> <strong>An</strong> <strong>FTZ</strong>?Albert Saphir<strong>ABS</strong> <strong>Consulting</strong><strong>An</strong> IMSW Worldwide, Inc Presentation.ti
<strong>What</strong> <strong>Is</strong> an <strong>FTZ</strong>?• <strong>An</strong> area inside id the United States t that t isdesignated as being outside CustomsTerritory.– Where items are brought into the Zone dutyfree.– Where Customs duty is determined when themerchandise leaves the Zone.
<strong>What</strong> <strong>Is</strong> a Zone Site?• <strong>An</strong> Industrial Park.• <strong>An</strong> Industrial Development Inside a Port orAirport.• A Company’s Facility.
<strong>What</strong> Can I Do in an <strong>FTZ</strong>?• Distribute• Store• Test and Inspect• Repack• Assemble• Repair• Manufacture
How Do I Make Money in an <strong>FTZ</strong>?• Duty Deferral• Duty Elimination• Duty Reduction
Duty Deferral• Duty is not paid when an item enters theZone.– <strong>An</strong> item enters the Zone in January.• Duty is paid when the item leaves the Zone.– The item leaves the Zone in April.• Four months of duty deferral.
Product ADuty OwedReceived JanuaryForeign-Trade ZoneProduct ADuty PaidShipped April
Duty Elimination• Testing and inspection is conducted in theZone duty free.– All rejected and destroyed items are duty free.• Exports are duty free.– All items exported from the Zone are duty free.
Foreign-Trade ZoneIb Inbound dGoodsIb Inbound dGoodsReceiving ProcessQuality ControlScrappedDuty Free
Product AExportedDuty FreeImportedProduct AExportForeign-Trade Zone
Duty Reduction• For manufacturing Zones.– The Zone allows a company to choose thelowest duty rate associated with its componentsand finished product(s).• A company imports 3 components.– A has a duty rate of 10%.– B has a duty rate of 9%.– C has a duty rate of 8%.
Duty Reduction• The company’s finished product has a 5%duty rate.• The company will pay for the value of thecomponents at the finished product rate.– A from 10% to 5%.– B from 9% to 5%.– C from 8% to 5%.• This reduction means a savings of 5% to g3%.
Foreign-Trade ZoneComponent A10% Duty RateComponent C8% Duty RateManufacturingProcessComponent B9% Duty RateFinal Product5% Duty RateComponent C5% Duty RateComponent tA5% Duty RateComponent B5% Duty Rate
Merchandise Processing Fee Savings• Each entry into the United States t is assesseda Merchandise Processing Fee (MPF).• Foreign-Trade Zones are allowed one entryper week and the MPF is collected on thatone entry.•Sample savings next page: +$330,000p g p gannually!
15 import shipments perweek: MPF $7,275Shipments directly into commerceRegular DC15 import shipments perweek; one entry filed at endof Week: MPF $485Shipments into commerce via <strong>FTZ</strong>with weekly entryForeign-Trade Zone
Albert Saphir - www.abs-consulting.netnetIMS Worldwide, Inc.Foreign-Trade Zone ConsultantsOver 197 Projects Completed NationwideRated #1 in Customer Servicefor over 30+ years
Change language