Swap Clear supports merchants running B2B2C transactions when selling goods internationally. It ensures that a merchant's B2B2C structure is reflected throughout the supply chain — from the duties and taxes calculated at checkout through to the commercial invoice and customs documentation.
Swap calculates the correct duty amount at checkout based on the merchant's transfer pricing logic (for example, cost + 5%), using cost prices available in Shopify.
All standard Swap Global features are included, such as pricing strategies, dynamic shipping rules, compliance management, and analytics.
This structure enables merchants to optimise international sales with regard to duties, as goods can cross the border at a lower declared value.
Structure
A B2B2C structure can be realised in several ways. The approach below is generally suitable for mid-market e-commerce merchants.
In summary:
The US entity acts as a limited-risk service provider.
The US entity is the seller of goods to the end consumer.
The US entity buys goods at cost plus a markup from the HQ entity.
A typical transfer pricing markup is 5–10%, though this is determined by the merchant and implemented by Swap in the supply chain logic.
To support this structure, merchants generally require:
A US legal entity with associated administration, including accounting, secretarial, taxation, and compliance
The US entity acting as seller of goods to consumers for US transactions
Transfer pricing agreements between the HQ entity and the US entity, reflected accurately in accounting
Sufficient substance in the US to qualify as an Importer of Record (see US entity requirements below)
A commercial rationale that justifies the existence of the US entity
Sales tax registration of the US entity
Cost data for each item in Shopify, which Swap uses to reflect transfer pricing in the supply chain
It is preferable that this structure is also reflected in:
The invoice shared with the consumer
The terms of service, clarifying that US transactions are facilitated by the US entity
A US payment processor for US sales
Transfer pricing transactions
Transfer pricing within this structure is typically managed via two transactions.
1. Product resale (cost +)
The US entity purchases goods from the HQ entity at cost plus an agreed markup.
2. Services under cooperation agreement (service fee)
The US entity pays the HQ entity a service fee for services that support its distribution activities. These may include warehousing, customer service, back-office support, foreign exchange risk management, and marketing.
US entity requirements
The US entity must meet applicable substance requirements to qualify as a US Importer of Record (IOR). Requirements governing what constitutes a qualifying IOR — including the level of physical presence and tangible assets required to be considered "located in the United States" — are defined by federal regulation and subject to change.
For the current official requirements, refer to the White House's documentation:
Swap does not provide tax or legal advice. Merchants should consult a qualified legal or tax advisor to confirm their specific obligations.
Commercial rationale
A well-evidenced commercial rationale supports the US entity's role in the transaction. The structure can be implemented at varying levels of operational substance, depending on the merchant's governance requirements and internal policies. Merchants should seek legal or tax advice to confirm what is appropriate for their situation.
Swap does not have full knowledge of each merchant's corporate structure and does not provide formal tax or legal advice regarding the activities implemented on the merchant side.
Further support
Swap can refer merchants to transfer pricing advisors if required to prepare documentation or establish appropriate transfer pricing levels. For a basic structure, advisory fees typically start at approximately £5,000 depending on scope. This can be bundled with legal service providers specialising in US company registration and documentation.