Originally Posted by gdl203
The Euro VAT tax loophole is as real as it gets. It's essentially disguised dumping and is slowly eating up US retail. Does anyone think there's a particularly good reason for the success and proliferation of online stores in the UK/EU pushing into the US market with less than average sites, 2 pics of each garment and no good information? There is one : they're effectively 20% under msrp because of VAT detax and lack of duties levying on this side of the Atlantic.
I have 4 duty related questions, wonder if anyone has any thoughts:
1. How does prepaid duty work (e.g. as offered by Farfetch)? Does the courier scrutinize the contents of each package, and does CBP treat duty prepaid packages any differently in practice? FWIW, based on the few purchases I've made from Farfetch and comparing prices for the same items at other EU boutiques, the prepaid duty surcharge appears to be insignificant to nonexistent.
2. How does CBP verify that the seller declared the accurate price on the customs form? Without a price tag or receipt in the package, what can they do when, e.g., a EG Cappelli tie or a pair of C&J shoes is declared at $20, or for that matter as a gift?
3. Are any other US retail segments vulnerable to tax/customs arbitrage, or is it primarily high end clothes (carried primarily by independent boutiques)?
4. How effective is customs evasion going in the other direction - are there opportunities for US sellers to sell to EU/Asian customers without customs detection?