When a company decides to import goods, are the tariffs paid on those goods collected by customs? Or do companies treat tariffs as tax expense? In any case, can a company write off these tariffs and eventually receive a tax refund on the import taxes they paid?
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2 Answers
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can a company write off these tariffs and eventually receive a tax refund on the import taxes they paid?
A country might enact provisions to exempt (possibly via a refund) from tariffs if the importer company or the intended use of the import meets certain conditions. But generalizing a reimbursement in the form of tax refund (or tax credit) would defeat the purpose of imposing tariffs.
Keep in mind that tariffs are one mechanism through which policymakers implement barriers to entry in the domestic market. Therefore, it would make no sense for the regulator to implement such barriers only to essentially reverse them thereafter.
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When a company decides to import goods, are the tariffs paid on those goods collected by customs?
Why would they not?
Or do companies treat tariffs as tax expense?
Tariffs are a tax. But you seem to be asking whether they are treated as income tax, and collected by the IRS. The answer to that is "no". That's why there's an "I" in "IRS": they're the Internal Revenue Service, as opposed to Customs, which collects taxes on external products.
In any case, can a company write off these tariffs
Of course. They're a business expense.
and eventually receive a tax refund on the import taxes they paid?
You seem to not understand what "write off" means. It means that you deduct it from your taxable income. That is, it decreases the amount of income that you need to pay taxes on. It doesn't directly reduce your taxes. For instance, suppose your tax rate is 20%, and you write off 1000. That doesn't mean you reduce your taxes by 1000, it means you reduce your income by 1000. You then don't have to pay taxes on that, which reduces taxes owed by 200.
