Importing a watch, the legal way!

[mfer]

I know, I know, why do it legal. I should sneak it in right?

Well, let's just say I'm not a risk-taker.

Let's say I buy a watch in Italy

It has a list price of 3,700 Euros
The VAT is 15%
The exchange rate (currently, but will change) is 1.36 E/$
So, I'm guessing it would be like..

E3,700 x 85% = E3,145 after VAT
E3,145 x 1.36 E/$ = $4,277

What would I pay import taxes on and how much?

Thanks TRF!

[toph]

well how much is VAT or sales tax in your state? what is the customs charge?.

In the UK VAT is 17.5% and a customs charge of 10%. thats why i did sneak in my GMT IIC.

you would pay these fees on the $4277 as that is the value paid for the watch.

[mfer]

Originally Posted by toph

well how much is VAT or sales tax in your state? what is the customs charge?.

In the UK VAT is 17.5% and a customs charge of 10%. thats why i did sneak in my GMT IIC.

you would pay these fees on the $4277 as that is the value paid for the watch.

Gotcha. Guess I need to figure out what the import tax is.

With the Euro and Pound falling vs the dollar, I might be buying a Pam on my honeymoon. YEAH!!!!

[mfer]

Also, Toph, I had a 183 on my wrist this weekend. You're gonna love it!!!!!!

[Parachrom]

When you leave Italy get the VAT tax back or in effect you arepaying double tax Italy and where you live.

Customs has a harmonized tax code which lists various goods by commodity code. That code tells what duty is . The value for currency is the currency you paid for the watch converted into the currency where you live. The rate of conversion is based on the date you bought the watch on..

You pay your local state tax and propbably a fed tax if applicable. Just my two cents worth. Given the value, sneaking it in and getting ccaught put you into a smuggling rap over XXX dollars which makes it federal and the feds take a dim view of smugglers. pay the taxes whatever they are and have a clear conscience

[toph]

Originally Posted by mfer

Gotcha. Guess I need to figure out what the import tax is.

With the Euro and Pound falling vs the dollar, I might be buying a Pam on my honeymoon. YEAH!!!!

but its funny how around 6 months ago the likes of me, UK and EU citizens, were buying in the USA and Carribean because of the weak dollar. how times change

what PAM you thinking about getting?

[mfer]

Well, nothing for sure yet as I change my mind frequently, but I'm really getting used to the size of the 44mm Lum's. Previously I had only tried on the 44mm Lum with the bracelet b/c I thought I wanted it. Now that I have had a 44mm Lum on leather on my wrist.......

The one that got me thinking, the 111. I'm not saying that is my decision yet, but strongly considering.

[mfer]

Originally Posted by Parachrom

When you leave Italy get the VAT tax back or in effect you arepaying double tax Italy and where you live.

Customs has a harmonized tax code which lists various goods by commodity code. That code tells what duty is . The value for currency is the currency you paid for the watch converted into the currency where you live. The rate of conversion is based on the date you bought the watch on..

You pay your local state tax and propbably a fed tax if applicable. Just my two cents worth. Given the value, sneaking it in and getting ccaught put you into a smuggling rap over XXX dollars which makes it federal and the feds take a dim view of smugglers. pay the taxes whatever they are and have a clear conscience

I want to do it correctly that is why I'm asking.
I would have to pay state tax??????? I could see federal tax, but state? God damn! This might not be worth it I guess. Guess it will really depend on the E/$ conversion in the end at the time of the trip. Right now the watch is about $500 cheaper in Italy v. the US. I really want to buy it new, and I can get out of state sales taxes in the US. Maybe I should just buy here. Crap!

[toph]

Originally Posted by mfer

Also, Toph, I had a 183 on my wrist this weekend. You're gonna love it!!!!!!

I know I cant wait- still about 6 weeks though

The 111 is a lovely watch. there are so many great looking PAM's and i am just getting into finding out more about them

[toph]

I would presume you will have to pay state sales tax and a federal customs charge. In effect that is how it works in the UK . BUT maybe the USA is different? I am sure someone over there will know for sure

[mfer]

Originally Posted by toph

I would presume you will have to pay state sales tax and a federal customs charge. In effect that is how it works in the UK . BUT maybe the USA is different? I am sure someone over there will know for sure

I guess I was counting on that. I mean I can get out of state sales tax (about 8.5%) already here in the US.


I would have thought, buying it out of the country would get me out of that seeing how I can do it here just by shipping it out of state.
*sigh*

[toph]

Originally Posted by mfer

I guess I was counting on that. I mean I can get out of state sales tax (about 8.5%) already here in the US.


I would have thought, buying it out of the country would get me out of that seeing how I can do it here just by shipping it out of state.
*sigh*

Yeah you could be right but check this link for some basic information
http://www.usaexportimport.com/duty_tax.php

[mfer]

Originally Posted by toph

Yeah you could be right but check this link for some basic information
http://www.usaexportimport.com/duty_tax.php

Ah, so they put the VAT right back on top again. Not really saving that 15%. I'm guessing I'll just buy in the states.

[TempoKing]

Last time I paid import tax when I came in at the Miami airport for around $4,500 in receipt
I paid around $100 dollars import tax. It was a Rolex Sea Dweller I think.

[mfer]

Originally Posted by TempoKing

Last time I paid import tax when I came in at the Miami airport for around $4,500 in receipt
I paid around $100 dollars import tax. It was a Rolex Sea Dweller I think.

????

Were they nice to you?!?!?! Did you pay VAT?

[TempoKing]

Originally Posted by mfer

????

Were they nice to you?!?!?! Did you pay VAT?

Nope thats what the tax is around 2% something plus a small difference for a bracelet
I got the VAT back
What I do is
I pay the net price after tax cash and then the tax untill they get my export stamped paper with my credit card
What they do once they receive the stamped exemption is to credit my credit card...simple really.

[mfer]

Originally Posted by TempoKing

Nope thats what the tax is around 2% something plus a small difference for a bracelet
I got the VAT back
What I do is
I pay the net price after tax cash and then the tax untill they get my export stamped paper with my credit card
What they do once they receive the stamped exemption is to credit my credit card...simple really.

I think I get it.

It has a list price of 3,700 Euros of which the VAT is 15%
I buy it for full price at the AD in Italy with my credit card.
E3,700 x 1.36 E/$ = $5,000

I then go through customs and declare it with my $5,000 credit card receipt. I pay a 2% fee which would be about $100. Customs give me something to prove that I paid tax on it. I then mail or fax that to the AD I bought if from in Italy and they credit my card 15% of the original $5,000 purchase which is about $750.

So I paid $5,000 (purchase price with VAT)
Was taxed $100 (2% import tax assumed)
and refunded $750 (15% VAT assumed)
my watch would be $4,350 (5000+100-750)

Is this correct?

Sounds like a deal b/c the watch over here is $5,600!!!! (and this is legal)

[James T]

Mik, from my understanding, you are buying a watch for personal use? Right? Then why are you worrying about import taxes, when you can use it already prior to entering the United States and thus declaring it is not even required...it will go under the category of personal effects...personal used items are not taxable.i'v done this a lot of times wherein I buy watches from my home country in the philippines and use it already when i come here. never had any problem..

[mfer]

Originally Posted by James T

Mik, from my understanding, you are buying a watch for personal use? Right? Then why are you worrying about import taxes, when you can use it already prior to entering the United States and thus declaring it is not even required...it will go under the category of personal effects...personal used items are not taxable.i'v done this a lot of times wherein I buy watches from my home country in the philippines and use it already when i come here. never had any problem..

I don't think this qualifies. It may be for personal use, but it is a luxury item being imported into the US. There are many that "get away" with it, but for $100 in taxes, I'll take the piece of mind in know that i still saved $1000 in the exchange rate!!!!

I'll let someone else chime in on if that is legal.

[BigHat]

Originally Posted by James T

Mik, from my understanding, you are buying a watch for personal use? Right? Then why are you worrying about import taxes, when you can use it already prior to entering the United States and thus declaring it is not even required...it will go under the category of personal effects...personal used items are not taxable.i'v done this a lot of times wherein I buy watches from my home country in the philippines and use it already when i come here. never had any problem..

This stuff makes my head hurt, but I know the below for sure based on extended trips overseas and very short Congressional delegations too.

When we spent 179 consecutive days out of the country, all items procured were exempt from import duty. Trust me, you pay import duty on personal items procured OCONUS when gone less than that. We hand out the customs forms and had to clear customs at Andrews AFB upon returning with Members of Congress. Yes, you can blow it off and you may or may not get burned, but you are expected to declare your purchases.

That 179 day exemption may have changed. About 10 years since I dealt with that.

[James T]

Matt, I think you are talking about purchases that are still brand new upon your return to the US..if you are wearing it already , it will be considered used and therefore exempt from taxes. i don't know, i may be wrong or i may be correct, but this is what i've been doing all my life and i've never been burned for it...maybe, these are loopholes in the law...

[BigHat]

Originally Posted by James T

Matt, I think you are talking about purchases that are still brand new upon your return to the US..if you are wearing it already , it will be considered used and therefore exempt from taxes. i don't know, i may be wrong or i may be correct, but this is what i've been doing all my life and i've never been burned for it...maybe, these are loopholes in the law...

Again, no expert on the VAT and all that. I know that shotguns (oh that was a major pain in the ass) from Turkey required paid duty (new unfired) and I have seen a few watches declared too. Frankly, most of your elected officials and their spouses don't bother. Just putting it on your wrist doesn't seem to exempt you from US duty, you have to have used it out of the country for more than a short while. I think we've read stories of folks carrying receipts for watch to prove that point.

Now the one thing I always wondered about was state taxes. In the US, you are expected to pay local sales tax on mail order and internet purchases that are exempt from withholding (too hard to do). Same applies to an out of state purchase. I'm waiting to meet someone that does that. Of course, if you declare it federally, there is now a record...

[mfer]

Coincidentally this same subject is being discuss on paneristi and there is a very informed individual over there that has the link to the laws etc. This is copied and pasted from that forum. I'm giving credit to the OP but not linking directly to the site for respect of TRF.

################################################## ##
Bringing a watch into the US - how to estimate duty owed
October 13 2008 at 7:03 PM Nick (Login nhs156)

Thought I’d share my new found wisdom re: US import duties. I recently returned from a trip to the Caribbean, and saved a bunch of money by buying outside the US. If the USD continues to strengthen, some of you might well contemplate bringing back purchases from abroad – hopefully this helps.
First – and I’ll get straight to the point – I should make it clear that I paid an effective duty rate of 1.7% on my Panerai. I contemplated bringing in the watch undeclared, but I believe the potential consequences of such an action aren’t worth the “crime”.

PENALTIES FOR FAILURE TO DECLARE

In a nutshell, I’ve heard (from US Customs directly) that failure to declare usually brings with it several consequences. First, they’ll either charge up to 7 times the official duty rate, or confiscate the product. On watches/expensive purchases, the former is typically the case. If you can’t pay the duty owed (they take credit cards), they’ll confiscate the watch. Once confiscated, the watch is gone permanently – i.e. it will not be returned even if you can drum up the cash later.

Another consequence is that you might be “red flagged”, which means that you’ll be searched every time you enter the US from abroad. The onus will be on you to prove that what you’re carrying is what you left the US with, i.e. that you didn’t buy anything abroad. To that end, US Customs recommends registering expensive items with them BEFORE you leave the US, so that you won’t get into trouble should you be searched and unable prove that you bought a particular product in the US. Few people do this – for obvious reasons; it’s a total hassle.

WEARING THE WATCH HOME, AND SHIPPING THE BOX AND PAPERS

A seemingly obvious way around the declaration issue – or so I thought. As it turns out, most shippers outside the US will now not ship empty watch boxes to the US. Apparently neither FedEx nor UPS support this practice (at least in the Caribbean), though DHL does. Even if you can find someone to ship the box, you still risk the box being intercepted by US Customs and being asked to pay duty - apparently.

US IMPORT DUTIES – HOW THEY WORK

In short, it’s complicated. The United States International Trade Commission has published a duty bible, known as the “Harmonized Tariff Schedule of the United States”. Chapter 91 therein is devoted to watches and clocks.

It can be found here: http://www.usitc.gov/tata/hts/bychapter/

It contains many pages, and includes different rates of duty by metal type, movement type, number of jewels in the movement, type of band/strap etc. In short, section 9102.21.70 on page 18 seemed to apply to my watch (being a Pam 288), which suggested I needed to pay duty of $1.53 + 4.2% on the case + 9.8% on the strap. This would, in theory, work out to be somewhere in the 4-5% range.

Before I go on, it should be noted that I have heard that few Customs agents are intimately familiar with the above-mentioned manual, and so charge pretty much whatever they feel like. I’ve heard that ~6% is commonplace, though that number is clearly pulled out of thin air. It pays to be informed – particularly on really expensive watches.

It should also be noted that the tariff schedule includes 2 columns with different tariff rates – general and special. The former applies the vast majority of the world’s economies – countries with whom the US has so-called normal trade relations. “Special” refers to countries with, well, abnormal trade relations and who may not be “in good standing” with the US – I believe North Korea may be part of that list. Duty rates for the latter can be extremely high – e.g. a multiple of the purchase price, but that is generally irrelevant for this discussion. I doubt anyone will be importing from a “special” country.

OK – so I new that I should be paying somewhere in the 4-5% duty rate, so how come I paid 1.7%. Because of so-called “exceptions”.
The US currently credits $800 per family member in a travel party towards the total value of all items bought abroad. In my case I was travelling with the family abroad (4 of us), so I got a $3,200 duty free credit. On top of that, the US also tends to charge a flat 3% per $1,000 per family member brought into the country. In my case this meant that up to $4,000 of purchases would be charged at 3% (again, this benefit can be pooled). Once this second credit is exhausted, the above-mentioned schedule kicks in – and only then.

It should be noted that the exceptions/credits are only granted where:
1. You’ve been out of the country 48 hours or more
2. You haven’t claimed the credit in the last 30 days
3. You did not travel to the country from which you are exporting with the primary objective of buying a product to take back to the US (obviously close-to-impossible to prove).

That’s about it. Easy when you know how – sort of. I would recommend that anyone contemplating whether or not to import/declare call their port of entry in the US to get an estimate of the amount owed. That will give you a sense of how “on top” of things the local agents are, and provide you with a name you can reference upon entry in the event that you find someone who knows what he/she is talking about. I did, and had this individual’s name in my back pocket in the event of unforeseen issues. Ultimately there were no issues.

Also check the USITC site regularly and don’t take my post as gospel – rules change, as do US Customs officials’ interpretation thereof.

Good luck!
################################################## ##

Now that 2% that Tempo was referring to works out very nicely in my example.

$5,000 purchase price
-1,600 free % (800x2people)
-2,000 at 3% (1000x2people)
$1,400 that I need to pay tax on

5% assumed import tax
$70 =5% on $1,400
$60 =3% on $2,000
$130 =in TAXES!!!!!! (as opposed to the $100 I got using the 2% rule)

I'm guessing I still get the VAT back.

5000+130-750
That is $1,200 off a brand new 111 from the homeland of Panerai!!!!

[toph]

Very good Mik- it makes sense (sort of )

[mfer]

Originally Posted by toph

Very good Mik- it makes sense (sort of )

All I really care about is getting a 111 (or other) from Italy!!!!
HA!

[toph]

Originally Posted by mfer

All I really care about is getting a 111 (or other) from Italy!!!!
HA!

what about the rest of your honeymoon?

[mfer]

Originally Posted by toph

what about the rest of your honeymoon?

Oh yeah, that'll be cool too!

Man you are making me look bad.

[toph]

Originally Posted by mfer

Oh yeah, that'll be cool too!

Man you are making me look bad.

sorry- it won't happen again. I have been to Greece twice - Rhodes with a buch of mates when i was 20 and 21.(so i can't help with Greece really.)

,Italy -I have only been to Rome which i would definitly recommend. The colliseum, the Spanish Steps, The Vatican City (St Peters Basilica) and the Trevi fountain are a few must see sights in someones lifetime

[escudoturbo]

What about the other way around? Anyone have any experience of buying a Rolex (second hand, maybe more than one funds allowing) in the USA and taking in back to the UK? There's a lot of nice watch's for sale on the forums but so many are in US that a shopping trip could be the answer, but import/exporting laws seem a mine field.

Many thanks

Baz