Australia’s Department of Immigration and Border Protection (Customs) released draft notices that outline its opinion on Incoterms 2010 Delivered Duty Paid (DDP) transactions and the liability for customs duty, revenue recovery and duty demands.
For Australian customs purposes, the definition of “owner” in the Customs Act 1901 is broad and includes: (1) “any person (other than an officer of Customs) being or holding himself or herself out to be the owner, importer, exporter, consignee, agent, or person possessed of, or beneficially interested in, or having any control of, or power of disposition over the goods.” The position of Australian Customs is that either a foreign supplier or Australian purchaser could be identified as the “owner” in a DDP transaction. While the supplier would generally make an import entry under the proper application of DDP terms, either could be issued a demand of payment of any unpaid import duties.
In the draft DIBP Notices 2016/12 and 2016/13, it is stated that the Comptroller-General of Customs has discretionary power to demand duty of any person identified as an “owner” so that liability for duties under a DDP contract is a joint liability between supplier and purchaser. In practical terms, when the foreign supplier fails to meet its duty obligations, the position of Customs is that it has an ability to issue a demand for duty on the Australian purchaser, even when duty is included in the DDP price.
Read a May 2016 report prepared by the KPMG member firm in Australia: DDP transactions – Who is responsible for duty?
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.