Duty Treatment of Clothes Hangers & Other Packaging Costs

28 October 2011

Many imports are packaged in a way to protect them, facilitate transport or add to their marketability. For example, clothing is often imported on hangers, some of this packaging is suitable for repetitive use. The customs classification rule (specifically Rule 5(b)) may give an importer an opportunity to reduce their import costs by allowing the packaging to be classified separately from the imported item.

 

Savings may arise when:

• The packaging would attract a lower rate of duty than the imported item. So for example, most garments are subject to duty at 12% but hangers, if classified separately may attract 6.5% (plastic) or 0% (wood) duty
• If the packaging is reusable then it may be re-exported outside of the EU. This movement will lend itself to customs duty relief

More guidance was recently issued by the EU Commission on the test for reusability making any planning more robust. We recommend you look at how your imports are packaged, the classification of the main imported item, the classification of the packaging and whether any of the packaging is re-exported. If you think this is likely to result in material cost savings then contact us to discuss realising any benefits.

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