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. Import

    A good or service brought into one country from another. Along ...
  6. 1040 Form

    The standard Internal Revenue Service (IRS) form that individuals ...
RELATED FAQS
  1. 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. ... Read Full Answer >>
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. 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?
  6. Economics

    NAFTA's Winners And Losers

    Read on to find out who this free-trade agreement helped, and who it hurt.
  7. Economics

    What is the Income Effect?

    In economics, the income effect is the change in the consumption of goods caused by a change in income, whether income goes up or down.
  8. Economics

    Asian LNG Prices: Not Likely To Rise Anytime Soon

    Asian LNG prices could stay low for an extended period of time, due to low oil prices, less demand and new LNG-producing projects on various continents.
  9. Economics

    Bulk Shipping Companies Struggle As Markets Soften

    The "soft" dry bulk shipping market that confronts shipping companies is a result of lower demand from China, and an excessive amount of bulk ships.
  10. Economics

    Venezuela Teeters On Edge As Oil Revenues Shrink

    Low oil prices have drastically revised the economic status quo -- dealing a destabilizing blow to oil-exporters like Venezuela due to falling oil revenue.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center