New law allows duty free car import to Caribbean
A new set of trade agreements are ratified into law between both the UK and other markets and the EU and other markets, bringing preferential duties for car imports. The E.P.A. (Economic Partnership Agreement) is an agreement between the UK and Cariforum Community (also known as Caricom Community) and the EU and Cariforum community. The purpose of this agreement is to support international trade between the UK or the EU and the Cariforum community and a variety of imports and exports have preferential import duties introduced replacing their previous levels of duty. This could be both for goods travelling from the UK or EU to islands in the Caribbean and vice versa.
What is the new EPA duty level for car imports?
The import duty for cars that qualify is now zero. It is also worth noting that as import duty is the first duty to be applied to the goods, other duties such as excise duties and VAT equivalents are applied on top. So effectively it is stopping the duty compounding.
The Cariforum Community is made up of 14 countries, of which 10 have ratified the new EPA into law. However, it is not commonly known and at the time of writing, the majority of people in the Caribbean Islands are hugely sceptical that the customs officers at the point of the goods entering the countries will allow for the preferential duties to be applied to them. Of course, this is a problem, but the hope is that it is a short-term teething issue and once presented with the correct documentation and information to support the preferential duties, the zero rating of duty will be applied.
How does a vehicle qualify for duty free import status?
Firstly, it doesn’t apply to all vehicles in all shapes and sizes. From the research we have carried out, the preferential duty applies to petrol, diesel, plug-in hybrid vehicles of different engine sizes. A pure electric vehicle (EV) may already have a different duty level which might be more favourable to the EPA duty level. We believe this is the case in Barbados where the current duty level for an electric vehicle is 10% duty but has also waived the excise duty and VAT on car imports which works out less than the EPA agreement where only the preferential duty level is available.
The preferential duties are available for right hand drive vehicles and left-hand drive vehicles. Don’t not assume that EU sourced cars are always left-hand drive as the EU does manufacture right hand drive cars for sale in right-hand drive countries. So it is important to note that the EU cars aren’t necessarily left-hand cars. So a RHD car could be sourced from the UK and the EU.
Which vehicles do not quality for duty free import status?
Vehicles which have been manufactured outside of the EU and UK cannot qualify. Neither do cars which have stopped enroute to the Caribbean. So cars which were from the EU or UK but were shipped to the USA and sold to you by a dealer in the US cannot qualify. Cars which must stop enroute to the Caribbean most remain under customs control for the entire journey until they reach their final destination.
The most important factor to establish the best duty rate available for a car import relates to establishing the rules of origin. The rules of origin are written in a very complicated way and they fundamentally state that a vehicle which is predominantly built in the UK will be eligible for the rules of origin. We would recommend getting in touch to discuss whether the car you are interested in meets the rules of origin for the UK before proceeding.
What documents are required?
Let’s look at which documents will be required to support a vehicle to be compliant with the EPA when assessed by the customs officers at the point of entry in your country. The EUR1 and the Certificate of Origin are the two key documents you will need. The Certificate of Origin is a document which tells you where the vehicle originates from. The EUR1 is a certificate stamped by customs which certifies that the vehicle meets the preferential rules required for the country it is destined for. Put simply, the EUR1 enables the preferential duty to be applied for the goods it specifies.
How can MHH International help you import your vehicle duty free?
In order for the vehicles to be eligible for preferential duty on import into the Cariforum states, the car must be shipped with an EUR1 certificate. An EUR1 certificate is only available when the vehicle meet the rules of origin laid out in the specific trade agreement. We can help by getting the EUR1 certificate for the cars we are supplying. If a vehicle has been built in Europe, it is not possible to supply the vehicle with an EUR1 from the UK. Cars built in Europe, have to be shipped from Europe. At MHH International, we are already doing this and we understand the process of ensuring that when a car is shipped from Europe, it is shipped with an the correct EUR1.
Which countries can benefit from zero import duty from the EPA?
We understand from our clients that the EPA is not a widely known concept in the majority of Cariforum countries. We are confident, having spoken to the UK Department of Business and Trade, that it has been already ratified in 10 Caribbean countries including St Lucia, Antigua, Greneda and Barbados. However, we are awaiting ratification of the agreement in Jamaica, the Bahamas, Trinidad and Tobago and Suriname. However, we can confirm that Jamaican customs are already accepting the preferential duty rates on cars that meet the requirements.
Please get in touch to find out more about how you can take advantage of this money saving opportunity and import your car into the Caribbean duty free. We will be delighted to help you on your journey to export your car with zero import duty.
