Duty Drawback
Duty drawback is a refund of customs duties, taxes and fees paid on imported goods that are later exported — either re-exported as-is, or incorporated into products that are then exported. Many regimes refund up to 99% of the eligible duty.
Drawback recovers duty that would otherwise be a dead cost on goods that never remained in the country. It is significant money for manufacturers and traders who import components and export finished goods, but it requires careful record-keeping to trace imports to exports.
Drawback turns a paid duty back into cash. For any business that imports inputs and exports output, it recovers money that would otherwise be lost on goods that only passed through — often enough to change the economics of a manufacturing or re-export operation.
A manufacturer imports $100,000 of components and pays $8,000 in duty, then exports the finished goods. Under a 99% drawback regime it can reclaim up to $8,000 × 99% = $7,920.
What percentage of duty is refunded?
It depends on the country, but many regimes refund up to 99% of the eligible duties, taxes and fees paid on the imported goods that are exported.
What qualifies for drawback?
Typically imported goods that are re-exported unused, or imported inputs used to manufacture goods that are then exported — subject to documentation tracing the imports to the exports.