Important Things to Know About Deemed Exports
Important Things to Know About Deemed Exports, This article explains the definition of a deemed export and its requirements. It also covers the exemptions to the deemed export rule, the requirements for an export license, and how to get a refund for the excise tax you paid. Regardless of your export activity, here are some important things to know about deemed exports:
Defining deemed export
Defining a deemed export involves identifying controlled items. The EAR and ITAR regulate the export of goods and services to foreign nationals. The DDTC governs military goods and services, including weapons and technologies. This includes all items on the United States Munitions List. Under ITAR, a deemed export may be triggered by a “visual inspection or view.” It also includes manufacturing operations, staff meetings, and oral conversations between employees.
Exemptions from deemed export rule
There are several exemptions to the deemed export rule. These include technology and software created by foreign national employees, employers hosting foreign scientists and students, and naturalized citizens and permanent residents. For individuals who have dual citizenship, the last citizenship they hold applies. These individuals do not need to be concerned about releasing U.S. technology or software. For more information, contact Nixon Peabody LLP. Further information is available in the Exemptions to the Deemed Export Rule section.
Requirements for obtaining a license
Requirements for obtaining a deemed export license may include the presence of a foreign national on your team. This license is required if the foreign national has access to sensitive technology and may involve export control of that technology to a country that does not have export controls. However, there are some exceptions to this rule. In some cases, a foreign national may not be required to obtain a license for export if they have no intention of selling or using the deemed export technology.
Refund of excise tax paid on deemed exports
If you have made a taxable supply and have opted for a refund, you can claim this tax back from the recipient. However, to receive the refund, you must file Form GST RFD-01 along with all the supporting documents. You can file the refund claim online. You must make sure to fill in the declaration in Statement 5B. It must also be included as Annexure I to your RFD-01 refund application.
Limitations of the deemed export rule
As an international business, you’ve likely heard about the “deemed export rule.” As the name implies, a ‘deemed export’ is an action that carries the risk of transfer of controlled technology, or software source code, to a foreign country. If you’re unsure about how a deemed export works, the Commerce Department provides some useful resources on this subject. In addition to the FAQs below, the BIS website provides more information about the deemed export rule and other aspects of it.
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