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Simple English definitions for legal terms
tariff engineering
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A quick definition of tariff engineering:
Tariff engineering is when companies change the way their products are made to pay less tax when importing them into a country. It's legal and involves making changes to the materials or structure of a product so that it qualifies for lower taxes. For example, a company might break up a product into smaller parts to avoid paying higher taxes.
A more thorough explanation:
Definition: Tariff engineering is a legal strategy used to reduce the amount of tariff paid on imported goods. It involves designing a product in a way that makes it eligible for a more favorable tariff treatment. This can be achieved by changing the product's characteristics, such as its raw materials or structure, or by breaking it up into smaller values to qualify for tariff exemption or lower taxation.
Examples:
- A company that imports shoes from another country may change the materials used to make the shoes to reduce the tariff paid on them.
- A manufacturer of electronic devices may break up a shipment of products into smaller values to qualify for tariff exemption or lower taxation.
These examples illustrate how companies can use tariff engineering to legally reduce the amount of tariff paid on imported goods. By making strategic changes to the product's characteristics, companies can take advantage of more favorable tariff treatment and save money on import costs.