Custom Duties: All you need to
know

What is Custom Duty?

When you ship something to another country, you or your customer may be asked to pay additional duties and taxes before the shipment is delivered.

Along with its pocket friendliness it also saves the environment. I.e. if you choose ocean freight the chance of envt. pollution reduces.

Governments charge tax on shipments from other countries because they want to:

1. Protect domestic companies from foreign competitors

2. Control the flow of certain products

3. Raise revenue through taxes

Duties and taxes on shipments are legal requirements that must be settled before your shipment can be delivered.

Import Duty: it is a type of tax imposed by a government on goods from other countries. Increased prices on imported goods make these products less “desirable” so buyers are encouraged to support the domestic market. You’ll find those import duty percentages vary for each category of products.

Commercial invoice: it is a required document in international shipping that describes the items in the shipment and their value. Commercial couriers and customs brokers refer to this document to process and clear your package through customs

How to calculate customs duty?

In order to calculate the import tax and import duty amount for your shipment, you need to multiply the taxable value of your shipment by your destination country’s tax and duty percentage. Note that import duty percentages vary for each category of goods.

The taxable value is usually based on the value of the goods, but depending on the valuation method of a country, it can also include other amounts.

For instance, there are two main valuation methods that countries use to determine taxable value:

1. FOB
2. CIF

FOB stands for “Free On Board”. In this case, the taxable value is the value of the product. While the definition also includes transportation loading, this only applies to items that are shipped by sea freight. If your shipment arrives by air freight it will not include the cost of transportation. CIF stands for “Cost, Insurance, and Freight”. In this case, the taxable value includes the item value, cost of insurance (if any), and transportation to the final receiver.

How to Prepare for custom duty and tax?

To ensure a smooth shipping experience, it’s best to know the following before you start shipping internationally.

Every country has a custom-duty tax threshold, which is the amount where a person begins paying taxes on an item. Custom duty may not apply to every international shipment, so it’s best to research the tax thresholds for each country you want to ship.

What is the customs clearance process?

The customs clearance process is:

First, when your shipment arrives in the destination country, the customs officer will inspect your package and look at your paperwork. All international shipments require a commercial invoice; shipments with certain restrictions may have additional paperwork attached. The customs officer will look at the value and category of your item on your commercial invoice.

They can also check your website or crowdfunding campaign to make sure the item value matches what is on the commercial invoice.

Next, they will see who will take care of the payment of the buyer or seller.

If the shipment arrives with duties paid, it means the seller has handled payment, allowing it to be released for delivery. If the shipment arrives with duties unpaid, the recipient will need to pay for it. Customs will hold the package, and the independent broker appointed by the courier will contact the recipient directly for payment.

Once payment for duties and taxes is received, the shipment is released and delivered.

At the end, it is upon you to choose the best method for your shipment.

At, Ziepe we provide users with a unique and futuristic web-based platform to book freight for your shipment as easy as booking a hotel or flight.

Do you want to take your business global? Book your marine freight Now! And take your business international.

Contact Ziepe

For more information: Visit: Ziepe

Call: 16049694373

Mail: [info@ziepe.com] (mailto:info@ziepe.com)