Drawback

AAA

DEFINITION of 'Drawback'

Any form of tax or tariff that is rebated to the payor. This type of rebate is awarded to importers and exporters who paid tax on goods imported into their home country, and then exported those goods after they arrived. Drawbacks allow importers to temporarily store or use their goods in the U.S. without paying a non-refundable tax.

INVESTOPEDIA EXPLAINS 'Drawback'

The goods that are exported do not have to be in the same form as when they were imported. For example, if raw materials were imported and used to manufacture another good, then the drawback will be paid if the manufactured goods are exported.

RELATED TERMS
  1. Tariff

    A tax imposed on imported goods and services. Tariffs are used ...
  2. Taxes

    An involuntary fee levied on corporations or individuals that ...
  3. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  4. Federal Tax Brackets

    Income tax groupings specified by the Internal Revenue Service ...
  5. 1040 Form

    The standard Internal Revenue Service (IRS) form that individuals ...
  6. Import

    A good or service brought into one country from another. Along ...
Related Articles
  1. Insurance

    A Review Of Past Recessions

    Here we look at the biggest economic declines in the U.S. since the Great Depression.
  2. Personal Finance

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.
  3. Economics

    The Basics Of Tariffs And Trade Barriers

    Everything you need to know - from the different types of tariffs to their effects on the local economy.
  4. Personal Finance

    Antitrust Defined

    Check out the history and reasons behind antitrust laws, as well as the arguments over them.
  5. Investing

    What is the candle maker's petition?

    The "Candle Maker's Petition" is a satire of protectionist tariffs written the by great French economist, Frederic Bastiat. In many ways, it expanded on the free market argument against mercantilism ...
  6. Economics

    What Is The World Trade Organization?

    The WTO sets the global rules of trade. But what exactly does it do and why do so many oppose it?
  7. Economics

    NAFTA's Winners And Losers

    Read on to find out who this free-trade agreement helped, and who it hurt.
  8. Investing Basics

    What is the difference between macroeconomics and finance?

    Dive into the world of economics by learning the key differences between macroeconomics and finance. These ideas help investors make good choices.
  9. Economics

    How successful is fiscal policy in guiding the national economy?

    See why it is difficult to evaluate the impact of fiscal policy on the national economy and how fiscal tools have failed to live up to expectations.
  10. Economics

    What do Keynes and Freidman have to do with fiscal and monetary policy?

    Find out how John Maynard Keynes and Milton Friedman influenced how modern economists and analysts think about fiscal and monetary policy.

You May Also Like

Hot Definitions
  1. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  2. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  3. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  4. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  5. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  6. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
Trading Center