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Customs & Taxes When Importing from China: US, EU, UK, Australia & Canada
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Understanding import duties, port charges, VAT, and other taxes is crucial when importing products from China, especially in a time when trade tensions are at an all-time high. However, each country or market has its own import duty rates and customs value calculation methods.
In this article, we explain what every Importer must know about import duties, customs valuation methods, and other taxes when importing products to the following countries and regions.
- United States
- European Union
- Canada
- Australia
- New Zealand
- United Kingdom
COVID-19 Update
How has the COVID-19 pandemic impacted tariffs?
The pandemic has not had any major impact, so far, on tariffs or other taxes levied on imported goods. The United States has maintained the Trump era tariffs on Chinese-made goods. At the time of writing, there are few signals that this will change in the near future.
Meanwhile, tariffs in the EU, UK, Australia, and most other countries have not changed in either direction.
If anything, the exploding freight cost increases in late 2020 and 2021 has turned out to be a far more severe issue for importers.
Do the increased freight costs affect import duties and other taxes?
Import tariffs are in some countries and markets, in part, calculated based on the freight cost – in particular, the EU and the United Kingdom. Hence, an increased freight cost results in higher import duty.
Example A: Pre-COVID 19 Freight Costs
- Product value: USD 10,000
- Freight cost: USD 2000
- Duty rate: 5%
Total: (10000 + 2000) x 5% = 600 USD
Example A: 2021 Freight Costs
- Product value: USD 10,000
- Freight cost: USD 10,000
- Duty rate: 5%
Total: (10000 + 10000) x 5% = 1000 USD
United States
Import duties are charged on all imports with a customs value of US$200 or above. As in the case of the EU, certain imports are taxed more than others – especially food and agricultural products.
How much are import duties from China to the United States?
Below follows a list of products and their respective duty rate in the United States:
- Wristwatches: 9.8% + US$1.53 per unit
- Tablet PC: 0%
- Solar Panels: 0%
- T-Shirts: 16.5%
- Electric Bikes: 0%
- LED Bulb Lights: 3.9%
- Peanuts: 131.8%
Notice that these rates don’t take the additional 10% to 25% tariff into consideration
Important update regarding the increased US-China tariffs
In early May 2019, the tariffs on the $200 B goods levied in September 2018, has increased from 10% to 25%. An additional tariff of 10% is effective from September 1st, on the ‘remaining’ $300 B of goods imported from China to the United States. As such, additional tariffs now apply to almost all goods imported from China.
As trade talks have seemingly stalled, it’s essential for importers worldwide to prepare for what is likely the new normal:
1. All companies importing to the US are affected by the new tariffs, including non-US companies importing as a foreign importer of record
2. The current 10% tariff may be increased to 25% in 2020
3. For many product categories, it’s still not an option to simply shift orders to suppliers in other Asian countries, as for most categories there simply are no factories outside of China. Hence, your option is most likely to either pass on the new tariffs so your customers – or not buy products at all.
Learn more about the US-China tariffs in this article
Merchandise Processing Fee (MPF)
All imports to the USA are subject to the Merchandise Processing Fee. The MFP is based on the order value, and is divided into two categories:
- Imports of goods valued less than US$2500: US$2, US$6, or US$9 per shipment
- Imports of goods valued more than US$2500: 0.3464% of the value of the goods
- (Minimum MPF: US$25, Maximum MPF: US$485)
The MPF is, in general, a rather negligible expense when importing from China. Click here to read more about the Merchandise Processing Fee.
Harbor Maintenance Fee (HMF)
HMF is collected on imports transported by sea. It was created in the late 80s and intended to require importers to share the maintenance costs of container terminals in the United States.
However, the HMF won’t make much of an impact on your bottom line – the current HMF rate is only 0.125% of the cargo value.
Additional taxes
So far, the United States doesn’t have a VAT. Instead, a so-called Federal excise tax is charged on certain imports, such as tobacco and alcohol.
For the time being, the Federal excise taxes don’t apply to consumer products imported from China.
Customs value
Custom duties, MPF, and HMF fees are calculated based on the FOB (Free on Board) value of the imported goods. This includes the following:
- Product cost
- Transportation cost (to Port of Loading in China)
- Export clearance (China)
Most Chinese suppliers quote products based on FOB terms. Click here to read more about Incoterms when importing from China.
European Union
The European Union is a single market. This means that all EU member states have the same import duty rates on products imported from non-EU countries. An importer only pays customs once, for products imported from China.
Import duties are not added to products sold within the European Union. Thus, your Spanish and German customers won’t need to pay customs on products that have already entered EU territory.
How much are import duties from China to the European Union?
The import duty rates vary between different products. Products that are not manufactured in the EU (e.g. consumer electronics) tend to have lower import duty rates – sometimes as low as 0%.
On the other hand, the opposite is often true for products that are considered part of an important industry in the EU.
Shoes, for example, have a duty rate of 12%. Below follows a list of common products and their respective duty rate in the EU:
- Wristwatches: 4.5% (Min: €0.30, Max: €0.80)
- Tablet PC: 0%
- Solar Panels: 0%
- T-Shirts: 12%
- Electric Bikes: 6%
- LED Bulb Lights: 4.7%
- Peanuts: 12.8%
Value Added Tax (VAT)
Value Added Tax (VAT) is compulsory in all EU states. Different member states have different VAT rates. Certain products, such as food and books, often have a reduced VAT rate.
However, the standard VAT rate applies to most consumer and industrial products imported from China. Click here for a list of VAT rates in all EU member states.
The VAT is added on top of the customs value, plus the duty (that is also based on the customs value). However, VAT added on imported products is treated as VAT paid on purchases made within the EU (including purchases from other EU states).
This means that the VAT added on the imports may also be offset against the VAT added on sales.
Customs Value
Practically, the EU customs value is based on the CIF (Cost Insurance Freight) price of the imported goods.
Below follows a slightly more detailed specification of which costs the customs value includes:
- Product price
- Tooling costs (e.g., injection molds)
- Shipping and logistics costs (to Port of Destination)
- Product Development Costs (e.g. product samples)
- Insurance
The customs value is not including the following costs:
- Commission and fees paid for purchasing agents (e.g. sourcing agents)
- Transportation costs generated in the importer’s country (e.g. transportation from the port to the final place of delivery)
- Costs generated in the Port of Destination (e.g. port fees and customs clearance fees)
Customs authorities are not making rough estimates. Instead, the declared value shall be clearly stated on the Bill of Lading – a document that is either issued by your supplier or freight forwarder.
This requires your supplier to declare the correct value. Otherwise, you’ll end up paying the wrong amount.
Canada
The tax situation in Canada is perhaps the most complex of the major English speaking countries. For Canadian importers, there are three different sales taxes to keep track of, in addition to import duties:
- Goods and Services Tax (GST)
- Harmonized Sales Tax (HST)
- Provincial sales tax (PST)
One, or a combination of two, sales taxes apply in all states. However, no state has all three taxes:
Alberta
- GST: Yes
- HST: No
- PST: No
- Total rate: 5% (Lowest)
Ontario
- GST: No
- HST: Yes
- PST: No
- Total rate: 8%
Prince Edward Island
- GST: Yes
- HST: No
- PST: Yes
- Total rate: 15% (Highest)
The taxes are charged based on the location of the company, rather than the entry point of the goods.
What are the import duties from China to Canada?
Here are a few examples of import duty rates for various products imported from China:
- Wrist-watches (mechanical display): 5%
- Men’s or boys’ overcoats (cotton): 18%
- Skirts (synthetic fibers): 18%
- Riding boots (rubber): 20%
- Hats and other headgear: 12.5%
Canada, like most other countries, set lower duty rates for less developed nations.
Customs Value
The customs value in Canada is based on the FOB price. As such, shipping costs are not included in the customs value, resulting in lower import duty. That said, Canadian importers must still include tooling, product samples, and service costs in the customs value.
Australia
Australian importers enjoy very lower duty rates, compared to their counterparts in the United States and the European Union. This can be explained by the fact that the Australian economy is not as reliant on manufacturing as most other developed countries.
What are the import duties from China to Australia?
Here are a few examples of duty rates applied to goods imported from China to Australia:
- Wristwatches: 0%
- Tablet PC: 0%
- Solar Panels: 0%
- T-Shirts: 10%
- Electric Bikes: 5%
- LED Bulb Lights: 5%
- Peanuts: 5%
China-Australia Free Trade Agreement (ChAFTA)
The China-Australia Free Trade Agreement was signed in 2015 and has gradually reduced tariffs on most products import from China to Australia to zero. As of January 2019, 93% of Chinese imports to Australia are tariff-free. However, imports from China are still subject to GST.
Minimum thresholds
From 1 July 2018, there is no longer a GST threshold. Previously, private importers did not pay GST on imports valued less than AU$1,000. However, this is no longer the case and GST applies to all imports, regardless of value.
Goods and Services Tax (GST)
GST (10%) is added on the Customs Value of the imported items, transportation, and insurance – plus the import duty. GST applies to all products imported from China to Australia.
In addition, foreign (non-Australian) importers are also required to get GST registered when reaching a certain threshold of goods sold to consumers in Australia.
Import Processing Charge
Imported goods valued more than AU$1000 are subject to an Import Processing Charge. The amount depends on three factors:
- Mode of transportation (Sea or Air Freight)
- Type of import declaration (Electronic or Documentary Import Declaration)
- Customs Value (Goods valued between AU$1,000 to 10,000, and goods valued more than AU$10,000)
The fee is charged for each import declaration. This means that you pay the Import Processing Charge each time you receive a shipment from China.
Luckily, the charge is usually in the range of AU$40 – 50. Click here to read more about the Import Processing Charge.
Customs value
Custom duties, GST, and Import Processing Charges are based on the goods FOB (Free on Board) value. This includes the following:
- Product cost
- Transportation cost (to Port of Loading in China)
- Export clearance (China)
United Kingdom
The United Kingdom is still largely in line with the EU system, meaning that:
- Import duties apply to most products imported from China to the UK
- Value-added tax (VAT) applies to imports
- The total customs value is largely calculated based on the CIF value (products + freight + insurance value)
It’s possible that tariffs and VAT rules will deviate from that of the EU in the future. For example, the UK could opt for an import tariff eliminating FTA along the lines of the China-Australia Free Trade Agreement (ChAFTA) at some point in the future.
Anti-Dumping Duties
The Chinese government has provided (and still is) certain industries and/or domestic manufacturers with subsidies. Essentially, this means that the relevant Chinese manufacturers are allowed to sell products below the market price. Good old price dumping.
These practices are not much liked by the EU and US – which often react with Anti-Dumping Duty measures. Sometimes the Anti-Dumping Duties target entire industries, sometimes they target individual manufacturers.
An Anti-Dumping Duty shall be taken seriously since these are often in the range of 40 – 60% (as a comparison, the average duty rate is around 5% in most western countries). If you would end up importing products that are under Anti-Dumping, you probably won’t be notified until the cargo arrives in the Port of Destination.
After all, the Chinese manufacturer is not liable for taxation outside of China.
Thus, it’s critical that you research whether Anti-Dumping Duty measures are imposed on your product and/or supplier before you place an order.
Anti-Dumping Duties are currently imposed on a wide range of products and industries. Read more about open cases in the European Union, the United States, and Australia in the links below:
Declared Value
Import duties and taxes are percentages calculated based on the Customs Value. The customs value is based on the declared value, which in turn shall be stated on Commercial Invoice – a document issued by the supplier.
It’s critical that the correct value is declared on the Commercial Invoice, or you might end up paying the wrong amount.
It’s always the importer’s responsibility to ensure that the correct declared value is stated on the Commercial Invoice. This responsibility cannot be shifted to the Chinese supplier.
HS Codes
The import duty is not entirely based on the declared value – it also varies between different products. However, customs officers are busy people.
They don’t have time to open every single carton and classify the items on their own. Instead, an HS code specifies the type of product/s.
HS Codes (Harmonized Commodity Description and Coding System) are part of an international classification system that makes this process quite simple.
Yet, it’s up to you to ensure that the correct HS Code is specified on the Commercial Invoice. Otherwise, you’ll end up paying an import duty rate based on the wrong product.
How to pay import duties and other taxes
There are various ways to pay the import duties and related taxes when importing from China. In fact, you can even pay them directly to your Chinese supplier. Below we list the most common cases:
Option 1: Pay import duties and other taxes to the freight forwarder
This option is probably the most simple. Your cargo arrives at the Port of Destination and the customs authorities add customs and taxes (e.g. VAT) based on the declared value and the HS code. This amount is then invoiced to you by your shipping company (e.g. FedEx or DHL.)
In some cases, you are required to pay the customs and tax invoice before the goods are delivered. However, you might get better payment terms if you’re an account holder of the freight company in question.
This service doesn’t come free of charge.
The shipping company usually charges somewhere between US$40 – 80 for managing the customs declaration.
Option 2: Apply for customs credit from your local customs authorities
Customs authorities offer customs credit to importers. Basically, a customs credit allows you to first get your cargo to your warehouse and pay customs and taxes at a later date.
The transaction is then made directly to a bank account operated by the Customs Authority, instead of paying the freight company (as detailed in Option #1).
Option 3: Purchase DDP (Delivery Duty Paid) directly from your supplier
DDP is an incoterm that, on top of shipping and port fees, includes custom duties. The import duty is included in the price you pay your supplier.
However, additional taxes such as VAT and GST is in general not included due to cross-border taxation issues. Instead, these taxes are paid upon arrival in the Port of Destination.
Are import duties refunded?
No, unlike VAT, import duties cannot be offset. Therefore the import duty shall be considered as part of the product cost – and not a temporary outlay.
Sometimes the duty rate is so low it barely makes a difference. However, in other cases, the duty rate makes up a substantial part of the procurement cost.
Do I need to pay import duties and taxes on replaced or repaired units?
In a scenario where you ship products to China, for repair, or if the supplier sends replacements for defective units to your country – you shall generally not need to pay import duties twice.
Instead, you should notify your freight forwarder or customs broker before the shipment – or hand in documentation after delivery.
Even if they end up charging you twice, you can in most cases get a refund or tax credits. Just make sure you have sufficient documentation to prove that the goods are actually replacements or repaired units.
Do we need to pay import duties or other taxes in China?
No, foreign companies and individuals are not tax subjects in China. Besides, any costs generated in China shall be included in the FOB (Free on Board) price.
However, if you purchase products on Ex-Work terms (EXW) from your Chinese supplier, no shipping and exporting related costs are included.
This means that you’ll need to pay for transportation from the supplier’s facility to the Port of Loading in China – AND pay for exporting clearance documents.
While this is not a tax, it’s still a cost you cannot avoid when buying from China.
In general, we recommend small to medium-sized importers to purchase products at FOB terms, rather than EXW terms.
How can reduce my import duties and other taxes when buying from China?
Understating the customs value is by far the most common method to reduce the import duty, as the amount is calculated based on the declared customs value.
This practice is, of course, illegal, and can, in more severe cases, result in lengthy jail terms.
Import duties can in some cases be reduced by exploiting free trade agreements between countries. However, the added transportation costs make such complex strategies loss-making for small to medium-sized businesses.
Who is responsible for paying import duties and other taxes when a product is dropshipped from China?
The importer is by definition the company or individual specified as the receiver of the goods. When dropshipping products from China, the parcel is sent directly from the wholesaler to the customer – without ever being imported by the seller.
Hence, the customer is therefore defined as the Importer, and may, therefore, need to pay import duties and other taxes, such as VAT or GST.
Customs Value Information
Import duties and other taxes are calculated based on the customs value. As such, it’s critical that importers understand which costs to include in the customs value, and ensure that the correct customs value is declared. Further, the calculation methods differ depending on the country.
What is customs value?
The Customs Value is the number used by the Customs authorities to calculate Import duties, fees, and other taxes.
Normally, the Customs Value is declared on the Commercial Invoice.
How can I calculate the customs?
That depends on the market. For example, the Customs value is based on the FOB (Free on Board) price in the United States. The FOB is basically the unit cost.
In the European Union, however, the Customs value is based on the CIF cost – which includes the freight cost and insurance (in addition to the unit price).
Hence, the shipper must declare the value based on the destination, which of course also requires the shipper to know (or, more accurately, be informed) of the correct Customs valuation method.
Are mold, prototype, and service costs included in the customs value?
Yes. What many Importers don’t know is that the declared value also includes costs for molds, samples, and related services. Hence, buyers cannot reduce the declared value by declaring part of the payment as a cost for design services. However, this only applies if you pay for design (or other) services abroad.
Services purchased locally are not part of the declared value.
However, there are some services, performed abroad, that are generally exempt from inclusion in the Customs value. Sourcing and Quality Assurance services, for example.
Molds and product samples are also part of the customs value. The Importer is often allowed to divide the cost of the tooling and samples over multiple shipments – or pay everything upfront.
What can happen if the customs value is not correctly declared?
Undervaluing the declared value amounts to tax fraud and is a criminal offense.
This is also a common practice, on everything from small parcels to containers. A practice that is estimated to cost the European Union as a whole, as much as €80 million in lost import duties.
How can the authorities check if the declared customs value is correct?
The Customs authorities have access to tools that can flag suspicious shipments. If the total declared value is deemed artificially low, the cargo is flagged and the Importer may be asked to provide additional evidence of the transaction value.
However, an artificially reduced Customs valuation may be discovered months, or even years, after entry.
The tax authorities may compare your records (i.e., compare the Commercial Invoice value to the actual transaction amount) during a company audit.
The Customs authorities can also access records, which ensures that importers cannot deliberately declare a large number of shipments below the customs threshold, in order to avoid paying import duties.
Surprisingly, we keep getting requests from Importers looking for guidance on how to game the system. We can assure you that there are no easy tricks that the authorities haven’t seen already.
How can I be sure that my supplier or freight forwarder declares the right Customs Value?
By not assuming that they will declare the correct value, to begin with.
The formula for success is simple:
1. Calculate the Customs value according to the valuation method in your market
2. Inform your supplier and freight forwarder of the Customs value
3. Request the supplier and/or the freight forwarder to provide you with copies of the Bill of Lading and Commercial Invoice (to verify that the correct value is declared)
Case Study: United States (FOB)
- Unit price: $12.5
- Quantity: 2200 pcs
- Tooling Cost: $500
- Transportation costs to Port of Loading: $200
- Transportation costs to Port of Destination: $1200 (Not included)
- Calculation: $12.5 x 2200 pcs + $500 + $200 = $28,200
Case Study: European Union (CIF)
- Unit price: $12.5
- Quantity: 2200 pcs
- Tooling Cost: $500
- Transportation costs to Port of Loading: $200
- Transportation costs to Port of Destination: $1200
- Calculation: $12.5 x 2200 pcs + $500 + $200 + $1200 = $29,400
Why does some supplier declare a lower customs value?
There are two reasons. First, some manufacturers think they are doing their buyers a favor.
Second, most suppliers don’t employ international taxation consultants. They simply don’t know the Customs valuation laws of every country in the world – even major markets such as the US and EU. It is your job to calculate the Customs value and inform your supplier and freight forwarded accordingly.
Customs Value by Country or Market
| Country / Market | Valuation Method | Read more |
|---|---|---|
United States | FOB | External link |
European Union | CIF | External link |
United Kingdom | CIF | External link |
| Australia | FOB | External link |
New Zealand | FOB | External link |
| Canada | FOB | External link |
| Singapore | CIF | External link |
| Malaysia | CIF | External link |
CIF (Cost Freight Insurance) = Product Cost + Insurance + All Transportation costs to the Port of Destination
FOB (Free on Board) = Product Cost + Transportation costs / Export clearance costs in the supplier’s country
We help startups & brands get quality products made in China & Vietnam
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- Product samples
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Co-founder of Asiaimportal (HK) Limited and based in Hong Kong. He has been quoted in and contributed to Bloomberg, SCMP, Alibaba Insights, Globalsources.com, China Chief Executive, Quartz Magazine and more.
82 Responses to “Customs & Taxes When Importing from China: US, EU, UK, Australia & Canada”
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You are very professional. I am a freight forwarder in Chinese mainland. I hope to have the opportunity to study and exchange with you and have the chance to win a win-win situation.
[…] You should work with a forwarder based on your own country, that can help you with shipping from India. You will not need to pay import duties or other taxes in India, but you need to work with a forwarder that has experience with the customs processes and import taxes in your country. […]
I’m the importer in US, dropship garments from China to EU. I want to do DDP term, but EU doesn’t allow DDP because only locally registered business can pay VAT. Is it correct? Now we have to do DPU.
Hi Natalie,
I think it is possible for non-EU companies to get VAT registered. I suggest you contact http://www.simplyVAT.com
Hi Fredrik,
I want to ask you about export tax of High voltage Disconnector (110kV to 550kV) from China to Vietnam? Thanks.
No idea. You will need to contact a customs consultant in Vietnam.
Good Day
Hope that you are well.
How much custom duties must one pay when importing from China to South Africa. The products are eyeshadow palettes, lipsticks and liquid foundation.
Kind Regards
Nokwanda
i found in alibaba some house build marerial .my friend is interest to purchase from china .Do you know how much does cost house shell ,window and door ,Tiles import from china in a 40 feet container shipping from china sunhai port to Eliizebeth port in NJ .I will need to know only the duty fee in USA . to you if you can give me the idea how much does it USA duty fee .
Best regards
nelly
Dear Fredrik, First of all I want to thank you for the clear and usefull information. My question is, how much tax we have to pay at the customs of Canada, when importing from China.
Two types of products we are interested, one is artificial leather and the HS code is 39211200. The other one is upholstery fabric and the HS code is 54075290.
Best Regards
Savas
Hi’ thanks for the blog firstly. It is really useful and contains a lot of good information. My question is about Amazon UK FBA. I am not a British’ I am here only for studying but who doesn’t want to earn money while studying right ? So my question is can I import goods from China to UK even if I don’t have tax number company or anything ? If yes which fees I should pay ? Or is Amazon taking care of custom fees for me ?
Thank you
Hi Kaan,
I think you need to register a limited company in the UK, to act as an importer, pay duties and VAT. Further, Amazon UK may also require that you have a company.
How much is import tax is Solar Panels from China.
Hi there, this depends on the country you want to import to!
Hi…I would like to purchase a projector from China, the cost is $1900.00 with free shipping by air..About how much duty would it cost when it arrives in the USA?
Hi Romeo,
That depends on the HS code. Without that, I cannot tell how much you will pay.
Hi,
How much it may cost the taxes and customs fees for a Phone 200 Euro from China to Germany?
Thanks
I’m buying custom coffee cups, saucers, and mugs for a coffee shop from a Chinese manufacturer. The FOB price including tooling and samples is about $10,500.00. The vendor does not want to do DDP shipping and wants me to pay tariffs, duties, fees, etc. How can I figure out how much that will be as well as who I pay and when. The vendor is no help. Thanks.
Hi Charles,
1. Which country are you importing the goods into?
2. Do you know the duty rate?
Hi, I just want to import a $114 phone from China to florida for personal use, do I have to pay duties or tax?
Thanks
Hi Fredrik ,
I found your blog very helpful . As I am importing binder clips to USA and its worth is below 2500 usd. Kindly tell me the duty charges is applicable or not.If applicable then what will be the USA custom duty.
Thanks
Hello Muhammad,
there is probably some customs duty for your product. However, we are unable to provide detailed info for each product free of charge as it takes time, and we have many similar requests.
You shall be able to find this info on http://www.cbp.gov
I want to import a computer from China to the Netherlands. The cost is 1249.99 USD, would I pay taxes?
Hi Daniel,
Yes, you will need to pay import duties and VAT. Not sure if it makes sense to import a single computer.. probably cheaper to buy it at home
I am looking order 100k USD worth of computer servers from Malaysia or China. is there any duty besides import VAT due? Thx for any clarity.
That depends on the country where you are based.
Hi! Great post, I was wondering more about the anti-dumping tariffs. I want to import thermal receipt paper from China and I was reading the reviews about the 2 Chinese companies that got hit with the 115% ad valorem tax.
What kind of duty would I be looking at?
Are these suppliers in the same industry?
Hi – this is a GREAT informational blog, thank you. Am going to speak to my business partner tomorrow about buying the startup pack. I have just started importing from china direct to Amazon FBA. MY first inventory arrived a week ago and is selling well…my question is this : Our goods were shipped DDP from Supplier/Manufacturer direct to Amazon warehouse in UK. Should I ‘assume’ that the Customs Duties will have been paid? Is there any record of this? Also, when/where is the VAT paid? (Supplier obviously had my Ltd Company details so is this recorded somewhere and i should expect an invoice from Customs & Revenue at some point?
My goods cleared customs, and are on the shelve sin amazon..but we have not paid a penny in Customs Duty or VAT. Our shipping quote from our supplier was
(Ignore the last 2 lines – forgot to delete them :))
Hi Dave!
1. Yes, DDP includes import duties. They should be able to provide some sort of receipt to prove that it’s paid though.
2. No, you should let your freight forwarder manage the VAT payment, and then let them bill you for it. the HMRC will not bill you. IF they did not bill you, you can still file a VAT declaration by yourself, assuming you are VAT registered.
But, ask for an import duty receipt first, as you paid DDP.
This is also covered in the Shipping & Customs Module in the Starter Package
I paid for items in alibaba online store for shoes and jewelries. But what got was different from what I saw online. Most of the items where all fake. So how should go about it to get money back because the items don’t worth the value of money I paid for it
Hi,
I suggest you read this post: https://www.chinaimportal.com/blog/report-trade-disputes-ip-violations-alibaba/
Informative article for people who want to know more information about import.
recently I purchased some goods from china total value of 1800 dollars of concrete cutting machine,
I found an online service to help me in getting the goods to me in california
so far I was charged 198 dollars for initial filing etc
and now another 175 for getting the merchandise to me including the taxes
are these charges regular and customary ?
That depends on the incoterm. Did you order according to CIF terms?
Hi fellows, please help me out.
I ordered some products from China and shipping by air was so expensive that I went ahead and chose shipping by sea.
I purchased goods through Ali Baba and thought the manufacturer was supposed to take care of all the shipping things, however, just like 20 min ago my supplier contacted me and asked me to provide them “some data” in order for the container to pass the customs in the USA.. I started asking questions like “what kind of data?” “who do I contact?” and etc. Supplier kinda got upset and asked me if that was my first time doing shipping by sea, which it is the first time.
Supplier just recommended me to pay a company like DHL to do the customs for me, however, I would like to find out myself, what info they require? what do I do when my goods arrive to the port of Miami, what are the steps to pay taxes, get my goods, what documents do I need?
etc.
Please someone who knows anything about it, give me some wise advises.
Thank you,
Hi Timur,
Which Incoterm did you order the shipping according to?
Hi, I was also a victim of scam. I asked a quotation from alibaba and received an email saying they are alibaba gold supplier. I paid for the price of the fitness tracker but then told me that the goods were detained at custom and required me to pay 50% electronic tax. Do you have any idea how can I go after those culprits? I sent them a tital of $980.
So I bought some toys action figures from Chinese sellers on eBay. I live in Canada. What can I expect?? I’m really worried. Thank you
What are you worried about?
I am wanting to import watches from alibaba costing 2$ / pieces. Total 10 pieces and shipping charges supplier told me is 25$ . So total I have to pay 42$ to them. How much other cost will be lavi on me like custom duty and all?
HI- I am receiving 1000 USD in furniture in Chicago? how much tax will I pay?
Great info, thanks!
When a dropshipper buys from Aliexpress, will the dropshipper pay for custom duties/tax, or will the customer who eventually receives the product, get the invoice to pay for custom duties. (that would be a terrible surprise…)
If I am dropshipping a $ 500 product to The Netherlands, my customer will get an additional $ 100 invoice for custom duties/tax? How do dropshippers deal with this situation?
Hi Peter,
We just wrote an article on this topic. The truth is that there is, as far as I know, no way to “solve” this situation… if you dropship from China.
I hope you are doing well, i am interested to buy 300 watches, which costs 10.000 dollar, in china aliexpress and to bring it,in germany, how much should i pay custom duty? taxes? thanks.
Hi Ardi,
Which country are you based in?
When we are buying goods on FOB basis from our supplier in China, Then to whom the carrier will charges the Import Processing Charges & Service charges on POD?
Hi Skumar,
From you. FOB will only get the goods to the port of loading, in China. You must still arrange shipping from there to POD.
Marina ,
Hi.
I would like to import Brown beans from china to Germany . how much one is paying VAT and tax in Germany ?
So if i buy LED Lights from China, send them money but they are in stock in California? Is there legal ramification that could fall on my lap?
Hi Steve,
Yes, that could complicate things. If I get this right, the supplier want you to pay them to an account in China, while the products are already imported to the US and ready for delivery in California?
Hi,
I am from Bulgaria and I’m planning to visit Dusseldorf Messe next week. I have a company, registered in Bulgaria. My question is: If I buy a Chinese machine at the exhibition where am I supposed to pay customs duties and VAT – in Germany (before the transportation of the machine to Bulgaria) or in Bulgaria when I deliver the machine to Bulgaria?
Hi,
If the machine is already in Germany, it means that it’s already imported into the EU. Hence, it would be like buying any machine in Germany.
You will pay German VAT in that case. However, if the machine is still in China (and yet to be shipped to the EU), you can have it delivered directly to Bulgaria instead.
I am importing 100 thumb drives values at $4.00 each and shipping about $50. How can I find out what the import taxes will be.
Hi Stan,
You can check out
I’m looking forward to importing some jewelries from China to Nepal. Would you please be kind enough to let me know about the charges other than item cost and shipping charge?
I’m bringing two used barcode scanners to China. They will remain in China. Each used barcode scanner was $295.00 in 2013 in US Dollars. 1. Do I need to fill out any forms and are there any taxes? 2. I’m bringing 6 new grounded universal adaptor plugs. Do I need to fill out any forms and are there taxes? Total value $42.48 US dollars.
Hi,
I would like to purchase shoes and clothing for my store from Ali-Express, most purchases will be approximately $500.00 or less; possibly three times a year. How do I calculate the fees and taxes I will be required to pay.
Great article.
I am relatively new to import and export business, and plan to manufacture electrical goods (control panel) in China and sell our products globally.
Initially, I like to import from China to USA (my headquarter) and then export to other countries, primarily in middle east.
What are all the taxes/duties I have to pay? Remember, the good will only be sold outside USA initially.
Thanks.
Hi Fredrik,
You mention 0% on solar panels for import into the USA. Does this also apply for the equipment you need to convert the solar power into the grid?
You will need a grid tie inverter to supply the solar power into the 110V grid……
So is the 0% for solar panels or for “solar panel equipment”…..?
Thanks for the wonderful content. i just have one question.
I live in USA. I like to import from China. How is the “Export Clearance Cost” calculated in China? How much is it?
You might want to add Canada. Packages under $20 are not charged duty!
Your article states the tariff duty is calculated on “product cost”. Exactly what is included in product cost? Does this include the manufacturing costs of the product, shipping, labels, etc? Does it also include the cost of making a mold, that stays in China? If so, why is the mold cost included and how is this handled on car manufacturing where the mold cost is spread over thousands of cars? What if any other costs are included?
Thank you.
Hi Fredrik,
so if I am about to import a tablet pc form the US to Sweden there shall be no Duty tax, nor VAT?
Hello Pablo,
Duties and VAT apply to imports from all non-EU states, including the United States.
just the Merchandise Processing Fee?
No, the MPF is only paid on imports into the US. Not on exports from the US.
Customs duty across various countries is a major issue for me because i have an import export business and i need to updated on every countries policies to be able to adjust with my clients. Thanks for sharing all the customs details regarding business from china.
Fredrik, I heard that Chinese suppliers avoid their VAT by hiding it from importer who finds out later that he cannot export goods due to lack of tax documentation.
Hmm, that sounds like something that can happen when buying according to Exworks terms. EXW includes nothing but the products, thus export clearance (probably the documents you are referring to) and delivery to port of loading in China is not included.
At a minimum, order according to Free on Board (FOB) terms. You save nothing by ordering according to EXW terms.
Fredrik, I read about this Value Added Tax (VAT) issue on “PassageMaker China” website.
Also, did you happen or know someone who did find himself in a situation where supplier charged inflated FOB price? Do you know the average FOB pricing in China? What if supplier is in China but has to transport goods to another city for whatever reasons which only adds to FOB price? Should I ask supplier where is port of destination?
Hello Boris,
First of all, most suppliers must transport goods to a port city on the coast. Of course this transportation costs money, but leaving the goods in the suppliers city is not saving any money.
FOB usually adds US$150 to US$500 on top of the EXW price, depending on volume and weight.
I want to buy some dog balls from China. Can anyone help me. The total cost is USD498, bu do i have to pay any other costs like import and vat?
You are right. Better play it safe in order to not end up in situation where supplier offers EXW only and when I try to get his export documents for clearance he refuses to supply them in case he tries to hide something from government etc.
Can you tell me what incoterm there is in a scenario where I get FOB from supplier and then hire freight forwarder to take consignment from FOB to port of destination or terminal or ultimate destination? Are CIF/CF, DAT and DAP incoterms still apply here?
Yes, you can apply any incoterm “on top” of FOB. However, if you already have a freight forwarder taking care of your cargo, I’d advise you to request a DAP or DAT shipment.
Thanks! DAT means delivery at customs terminal?
Yes, if you import goods in Europe, then European VAT will apply to the products. It’s is critical to point here that a new VAT Directive also applies to B2C sales of digital services in the EU. That means that all digital services sold to consumers in the EU will be vatable. VAT on digital services will now be applicable based on where the end consumer is based. Post-2015, it is all about the location of the consumer and not the supplier.
Hello Marie,
Interesting information. But I assume it’s up to the EU based buyer to declare the foreign purchase and pay VAT? I don’t see how this could be enforced on foreign businesses, by the EU.
Great blog post as always!
Thank you so much Fredrik!
Thanks! We’ve already received a lot of positive feedback on this article.
hi i have just bought 3 x samsung s7 edge phones and now the sender in china says we have to pay customs tax is this correct???
i enclose a copy …..
I’m really sorry to tell you,just now we have check with agent.
They said the package was detain at the customs due to the Beijing customs restrictly checking ,all package been opened and checked one by one,
finally they found that the brand products in the package, they require you pay $ 398.00 as tax,it’s just an accident.
please arrange $ 398.00 within 72 hours, then we can talk with custom guy and go ahead the shipping, thank you
So your goods need be paid a custom Brand charges and then would be sent to you successfully!
All the customer should pay for the tax,not only you!
You need pay face to face by cash in the customs office and i know that it is unconvenient for you come to China!
You pay the custom Brand charges to our bank account,
and after you pay, we withdraw your money and then we send your money to the customs as the custom Brand charges for your order !
without tax they won’t release the package ,hope your understanding.
please help me
Hi Jason,
This is a fraud. You will not receive any phones, and you should not send more money to this scammer.