For many reasons, importing electric bikes from China to many other countries is with very high taxes like anti-dumping tax and import tax, etc. We can not control these countries’ import policies, but we can manage to avoid or reduce the taxes.
Here are the solutions:
- CO – Certificate of Origin from the countries with good relationship and no such taxes for products to importing countries.
- CKD – Completely Knocked Down.
- DDP – Ship the products to the countries with high anti-dumping tax with DDP trade term (Door to door with all tax paid).
- Localization – Localization in the countries which have high anti-dumping taxes.
Table of Contents
1. CO – Certificate of Origin
Certificate of Origin from the countries with good relationship and no such taxes for products to importing countries. This does not mean just transporting electric bikes from China to other countries with a non-anti-dumping tax or import tax-free to importing countries and getting CO there, this kind of behavior is illegal too. Once is found by the local government, the fine, penalty, or punishment is very serious, or devastating.
The legal way is the produce the electric bikes with anti-dumping tax and high import tax there in these countries, and then export from these countries, such as Viet Nam, Korea, Malaysia, Indonesia, etc. We are doing business so we only talk about the most profits and fewer taxes, no any opinion about any counties politics. But some countries with a good relationship with importing countries their products do have fewer taxes.
2. CKD – Completely Knocked Down
Take Electric bikes under EU regulation EN15194:2017 for example: CKD to EU is no anti-dumping tax. That means you just import components to the EU and do the installation there. In this form, the frames should be unpainted, and the spokes and rims should be uninstalled too.
3. DDP – Door to Door with All Tax Paid
Ship the products to the countries with high anti-dumping tax with DDP trade term(Door to door with all tax paid). This is the trade term that sellers ship products to buyers’ warehouses or receiving addresses with all taxes paid. In this trade term buyers only have to wait for the products to arrive after payment, no need to do anything about the logistic, customs clearance, taxes, etc.
But there is a risk here, which can be very serious for big companies. For in DDP terms, sellers do the customs clearance in both countries, not in the name of the buyer’s company name and vat number. In the EU, the governments have 6-10 years of valid rights to inspect all the market products. If the government asks buyers for the formal and legal origin of the products, and buyers can not offer, then they will face a great penalty.
Another risk is the vat tax in the EU. If buyers do in the DDP term, they can not get a tax refund of vat tax up to about 19%.
The last problem is that without formal documents of the products, customers can not get government subsidies.
Localization in the countries which have high anti-dumping taxes.
After the EU government started charging high anti-dumping taxes on some products like electric bikes from China, some Chinese Companies managed to localize their company in EU countries. This is a good way, but some mid-size and small-size companies can not afford to do so. For to establish a company in the EU costs too high too. Therefore the labor cost, management cost, production cost, land cost and any other costs in the EU are not low too which will make the product’s final price high too.