Customs Duty De Minimis: Important Info for International Shipping

Customs and taxes – these are the words that strike fear into many small business owners’ hearts. Complexity and high prices are no friends to those who are just trying to make it. Fortunately, there is a method to the madness.

The whole idea behind customs is to allow different countries to control the flow of goods in and out of their borders. They want to incentivize some kinds of trade and disincentivize other kinds of trade. And, of course, we all know what plain old taxes are for.

In this article, we’re going to talk about customs duties, value-added taxes (VAT), de minimis values, declared values, and how all of these affect you. You’ll walk away with a much clearer understanding of how international shipping in general works.

 

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What are customs duties?

First, let’s cover what a customs duty actually is. According to U.S. Customs and Border Protection, “Customs Duty is a tariff or tax imposed on goods when transported across international borders. The purpose of Customs Duty is to protect each country’s economy, residents, jobs, environment, etc., by controlling the flow of goods, especially restrictive and prohibited goods, into and out of the country.”

The linked article then goes onto explain that different items have different tariffs, and some are not dutiable at all. Some duties are based on a percentage, while others are a flat rate. To know the specific rate (if any) that applies to your goods, you will need to find your item’s code on the Harmonized Tariff Schedule.

In short, customs duties are taxes on goods based on their unique tariff code.

 

What is a customs duty de minimis value?

Countries don’t necessarily want to levy duties on every good that flows in and out of their borders. For example, does it really make sense for the US to charge duties on an imported item worth $10? No! For that reason, the U.S. has a de minimis value of $800 USD. If an item imported from another country has a value of less than $800 USD, there will not be any additional charges.

Therefore, a customs duty de minimis value (or VAT de minimis value) is the minimum threshold which an imported good’s value most exceed in order to incur customs (or VAT) charges.

 

What is VAT?

VAT is short for value-added tax. The purpose of the VAT, at least as it relates to imports, is pretty similar to the purpose of customs duties. You will most likely hear the term VAT used as it relates to the European Union.

Like customs duties, VAT is due based on a percentage of the sale price. It’s a little different though, and the European Commission explains it well on their site when the say the following:

The VAT due on any sale is a percentage of the sale price but from this the taxable person is entitled to deduct all the tax already paid at the preceding stage. Therefore, double taxation is avoided and tax is paid only on the value added at each stage of production and distribution. In this way, as the final price of the product is equal to the sum of the values added at each preceding stage, the final VAT paid is made up of the sum of the VAT paid at each stage.

Long story short, if you ship certain goods (see Harmonized Tariff Schedule) above a certain value to certain countries (see De Minimis values), you can end up paying both customs duties and VAT!

 

 

What is the declared value?

Customs and VAT all need to be calculated based on some value. That value is the declared value that you choose when shipping internationally. We’re not going to cover within the scope of this article what precisely that value should be, but this post and its accompanying video cover it really well.

One really important word to the wise here is this: don’t lowball the declared value to save money on customs or taxes. That’s illegal.

 

How are customs duties and VAT charged?

By now, we’ve established that under certain circumstances, cross-border shipments are subject to taxes and duties. The only questions remaining, then are how they charged and to whom?

Unfortunately, there isn’t a cut-and-dry answer here. The terms of the shipment determine both of these. For freight shipping, who pays duties and when they are paid is based on incoterms. Sometimes the seller pays, sometimes the buyer pays. Depending on the nature of the shipment, the customs may be charged as part of the shipment itself or after the fact and before the release of the goods. For freight shipping, you need to discuss this with your freight forwarder.

International shipping of goods to individuals is a little different. If the goods you ship exceed the customs duty de minimis value of the recipient’s country, then there will be customs duties and perhaps VAT as well. The customer, in most cases, will pay that upon receipt of the package.

Think that’s an awful experience? It can be. A lot of international buyers aren’t used to paying duties or taxes when they receive goods from other countries. If you want to protect your customers from that, you can pay the fees upfront on their behalf through services we provide such as Asendia Tracked Duty Paid.

 

Why this all matters for your business

There is an enormous amount of information in this article, and it’s hard to take in all at once. So we’ll break this down into a handful of lessons.

  1. When you ship internationally, you or your customers might incur customs charges.
  2. You or your customers may also incur VAT charges.
  3. Customs and VAT are separate, and often, someone has to pay both.
  4. The customs duty is based on an item’s destination and its tariff code on the Harmonized Tariff Schedule.
  5. In order for duties to be levied, the declared value of the shipped good must exceed the customs duty de minimis value.
  6. Who pays the customs and VAT depends on the agreement between the seller and the buyer. If you’re sending items to individual customers overseas, assume they will be paying customs or VAT and plan around that.

 

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De minimis customs duty values by country

For your convenience, we are going to conclude this article with a list of de minimis values.

Our source is Zonos and we’ve copied their table directly since we like the format. All this information is otherwise publicly available.

This information was last updated on Wednesday, January 22, 2020.

CountryISODuty de minimisTax de minimis
🇦🇩 AndorraAD220.00 EUR0.00 EUR
🇦🇪 United Arab EmiratesAE1000.00 AED0.00 AED
🇦🇫 AfghanistanAF0.00 USD0.00 USD
🇦🇬 Antigua & BarbudaAG0.00 USD0.00 USD
🇦🇮 AnguillaAI0.00 XCD0.00 XCD
🇦🇱 AlbaniaAL100.00 USD100.00 USD
🇦🇲 ArmeniaAM300.00 USD300.00 USD
🇦🇴 AngolaAO100.00 USD100.00 USD
🇦🇷 ArgentinaAR25.00 USD25.00 USD
🇦🇸 American SamoaAS0.00 USD0.00 USD
🇦🇹 AustriaAT150.00 EUR22.00 EUR
🇦🇺 AustraliaAU1000.00 AUD1000.00 AUD
🇦🇼 ArubaAW0.00 USD0.00 USD
🇦🇽 Åland IslandsAX0.00 USD0.00 USD
🇦🇿 AzerbaijanAZ0.00 USD0.00 USD
🇧🇦 Bosnia & HerzegovinaBA50.00 BAM0.00 EUR
🇧🇧 BarbadosBB0.00 BBD0.00 BBD
🇧🇩 BangladeshBD1000.00 BDT0.00 BDT
🇧🇪 BelgiumBE150.00 EUR22.00 EUR
🇧🇫 Burkina FasoBF0.00 USD0.00 USD
🇧🇬 BulgariaBG150.00 EUR30.00 BGN
🇧🇭 BahrainBH250.00 BHD0.00 BHD
🇧🇮 BurundiBI0.00 USD0.00 USD
🇧🇯 BeninBJ50.00 USD50.00 USD
🇧🇱 St. BarthelemyBL0.00 EUR0.00 EUR
🇧🇲 BermudaBM0.00 BMD0.00 BMD
🇧🇳 Brunei Darussalam ⚠️BN0.00 BND0.00 BND
🇧🇴 BoliviaBO0.00 USD0.00 USD
🇧🇶 Bonaire, St.Eustatius & SabaBQ100.00 USD100.00 USD
🇧🇷 BrazilBR0.00 BRL0.00 BRL
🇧🇸 BahamasBS0.00 USD0.00 USD
🇧🇹 BhutanBT0.00 INR0.00 INR
🇧🇼 BotswanaBW0.00 BWP0.00 BWP
🇧🇾 BelarusBY22.00 EUR22.00 EUR
🇧🇿 BelizeBZ0.00 BZD0.00 BZD
🇨🇦 CanadaCA20.00 CAD20.00 CAD
🇨🇩 Congo, Democratic Republic of theCD0.00 USD0.00 USD
🇨🇫 Central African RepublicCF20.00 USD0.00 USD
🇨🇬 CongoCG12.00 USD12.00 USD
🇨🇭 Switzerland ⚠️CH0.00 CHF0.00 CHF
🇨🇮 Ivory CoastCI20.00 USD20.00 USD
🇨🇰 Cook IslandsCK0.00 NZD0.00 NZD
🇨🇱 ChileCL30.00 USD30.00 USD
🇨🇲 CameroonCM400.00 USD400.00 USD
🇨🇳 China, People’s Republic of ⚠️CN0.00 CNY0.00 CNY
🇨🇴 ColombiaCO0.00 COP200.00 USD
🇨🇷 Costa RicaCR50.00 USD50.00 USD
🇨🇺 CubaCU0.00 USD0.00 USD
🇨🇻 Cape VerdeCV200.00 USD200.00 USD
🇨🇼 CuraçaoCW100.00 USD100.00 USD
🇨🇾 CyprusCY150.00 EUR17.09 EUR
🇨🇿 Czech RepublicCZ150.00 EUR22.00 EUR
🇩🇪 GermanyDE150.00 EUR22.00 EUR
🇩🇯 DjiboutiDJ0.00 DJF0.00 DJF
🇩🇰 DenmarkDK1150.00 DKK80.00 DKK
🇩🇲 DominicaDM0.00 USD0.00 USD
🇩🇴 Dominican RepublicDO200.00 USD200.00 USD
🇩🇿 AlgeriaDZ50000.00 DZD50000.00 DZD
🇪🇨 EcuadorEC10.00 USD0.00 USD
🇪🇪 EstoniaEE150.00 EUR21.98 EUR
🇪🇬 EgyptEG0.00 EGP0.00 EGP
🇪🇭 Western SaharaEH0.00 USD0.00 USD
🇪🇷 EritreaER100.00 USD0.00 USD
🇪🇸 SpainES150.00 EUR22.00 EUR
🇪🇹 EthiopiaET25.00 EUR25.00 EUR
🇫🇮 Finland ⚠️FI150.00 EUR22.00 EUR
🇫🇯 FijiFJ200.00 FJD200.00 FJD
🇫🇰 Falkland Islands (Malvinas)FK0.00 USD0.00 USD
🇫🇲 Micronesia, Federated States ofFM0.00 USD0.00 USD
🇫🇴 Faroe Islands (Denmark)FO80.00 DKK80.00 DKK
🇫🇷 FranceFR150.00 EUR0.00 EUR
🇬🇦 GabonGA10.00 USD10.00 USD
🇬🇧 United KingdomGB135.00 GBP15.00 GBP
🇬🇩 GrenadaGD20.00 XCD0.00 USD
🇬🇪 GeorgiaGE170.00 USD170.00 USD
🇬🇫 French GuianaGF150.00 EUR0.00 EUR
🇬🇬 GuernseyGG0.00 EUR0.00 EUR
🇬🇭 GhanaGH5.00 USD0.00 USD
🇬🇮 GibraltarGI0.00 USD0.00 USD
🇬🇱 Greenland (Denmark)GL80.00 DKK80.00 DKK
🇬🇲 GambiaGM100.00 USD100.00 USD
🇬🇳 GuineaGN15.00 USD15.00 USD
🇬🇵 GuadeloupeGP150.00 EUR0.00 EUR
🇬🇶 Equatorial GuineaGQ200.00 USD0.00 USD
🇬🇷 GreeceGR150.00 EUR0.00 EUR
🇬🇹 GuatemalaGT0.00 USD0.00 USD
🇬🇺 GuamGU0.00 USD0.00 USD
🇬🇼 Guinea-BissauGW100.00 USD0.00 USD
🇬🇾 GuyanaGY0.00 USD0.00 USD
🇭🇰 Hong KongHK0.00 USD0.00 USD
🇭🇲 Heard Island and McDonald IslandsHM0.00 USD0.00 USD
🇭🇳 HondurasHN0.00 USD0.00 USD
🇭🇷 CroatiaHR150.00 EUR22.00 EUR
🇭🇹 HaitiHT0.00 USD0.00 USD
🇭🇺 HungaryHU150.00 EUR22.00 EUR
🇮🇩 IndonesiaID75.00 USD75.00 USD
🇮🇪 Ireland ⚠️IE150.00 EUR22.00 EUR
🇮🇱 IsraelIL500.00 USD75.00 USD
🇮🇲 Isle of ManIM135.00 GBP15.00 GBP
🇮🇳 IndiaIN0.00 INR0.00 INR
🇮🇶 IraqIQ0.00 USD0.00 USD
🇮🇷 IranIR50.00 USD50.00 USD
🇮🇸 IcelandIS0.00 ISK0.00 ISK
🇮🇹 ItalyIT150.00 EUR22.00 EUR
🇯🇪 Jersey ⚠️JE0.00 GBP0.00 GBP
🇯🇲 JamaicaJM50.00 USD0.00 USD
🇯🇴 JordanJO100.00 JOD0.00 JOD
🇯🇵 Japan ⚠️JP10000.00 JPY10000.00 JPY
🇰🇪 KenyaKE0.00 USD0.00 USD
🇰🇬 KyrgyzstanKG120.00 USD120.00 USD
🇰🇭 CambodiaKH50.00 USD50.00 USD
🇰🇮 KiribatiKI0.00 USD0.00 USD
🇰🇲 ComorosKM0.00 USD0.00 USD
🇰🇳 St. Kitts and NevisKN0.00 USD0.00 USD
🇰🇵 Korea, Democratic People’s Republic ofKP0.00 USD0.00 USD
🇰🇷 Korea, The Republic ofKR150.00 USD150.00 USD
🇰🇼 KuwaitKW0.00 USD0.00 USD
🇰🇾 Cayman IslandsKY0.00 USD0.00 USD
🇰🇿 KazakhstanKZ500.00 EUR500.00 EUR
🇱🇦 LaosLA0.00 LAK0.00 LAK
🇱🇧 LebanonLB0.00 USD0.00 USD
🇱🇨 St. LuciaLC0.00 USD0.00 USD
🇱🇮 Liechtenstein ⚠️LI0.00 CHF0.00 CHF
🇱🇰 Sri LankaLK0.00 LKR0.00 LKR
🇱🇷 LiberiaLR0.00 USD0.00 USD
🇱🇸 LesothoLS0.00 USD0.00 USD
🇱🇹 LithuaniaLT150.00 EUR22.00 EUR
🇱🇺 LuxembourgLU150.00 EUR22.00 EUR
🇱🇻 LatviaLV150.00 EUR22.00 EUR
🇱🇾 LibyaLY0.00 USD0.00 USD
🇲🇦 MoroccoMA30.00 USD30.00 USD
🇲🇨 MonacoMC150.00 EUR22.00 EUR
🇲🇩 MoldovaMD300.00 EUR300.00 EUR
🇲🇪 MontenegroME75.00 EUR0.00 EUR
🇲🇫 St. MaartenMF100.00 USD0.00 USD
🇲🇬 MadagascarMG20.00 USD20.00 USD
🇲🇭 Marshall IslandsMH0.00 USD0.00 USD
🇲🇰 MacedoniaMK22.00 EUR22.00 EUR
🇲🇱 MaliML20.00 USD20.00 USD
🇲🇲 MyanmarMM0.00 USD0.00 USD
🇲🇳 MongoliaMN0.00 MNT0.00 MNT
🇲🇴 MacauMO0.00 MOP0.00 MOP
🇲🇵 Northern Mariana IslandsMP0.00 USD0.00 USD
🇲🇶 MartiniqueMQ150.00 EUR0.00 EUR
🇲🇷 MauritaniaMR25.00 USD25.00 USD
🇲🇸 MontserratMS0.00 USD0.00 USD
🇲🇹 MaltaMT150.00 EUR22.00 EUR
🇲🇺 MauritiusMU500.00 MUR500.00 MUR
🇲🇻 MaldivesMV6000.00 MVR0.00 MVR
🇲🇼 MalawiMW0.00 MWK0.00 MWK
🇲🇽 MexicoMX1000.00 USD50.00 USD
🇲🇾 MalaysiaMY500.00 MYR0.00 MYR
🇲🇿 MozambiqueMZ30.00 USD30.00 USD
🇳🇦 NamibiaNA0.00 USD0.00 USD
🇳🇨 New CaledoniaNC0.00 USD0.00 USD
🇳🇪 NigerNE20.00 USD0.00 USD
🇳🇫 Norfolk IslandNF50.00 USD0.00 USD
🇳🇬 NigeriaNG0.00 USD0.00 USD
🇳🇮 NicaraguaNI0.00 NIO0.00 NIO
🇳🇱 NetherlandsNL150.00 EUR22.00 EUR
🇳🇴 NorwayNO350.00 NOK350.00 NOK
🇳🇵 NepalNP0.00 NPR0.00 NPR
🇳🇷 Nauru, Republic OfNR0.00 USD0.00 USD
🇳🇺 Niue IslandNU0.00 USD0.00 USD
🇳🇿 New ZealandNZ0.00 NZD0.00 NZD
🇴🇲 OmanOM0.00 USD0.00 USD
🇵🇦 PanamaPA100.00 PAB100.00 PAB
🇵🇪 PeruPE200.00 USD200.00 USD
🇵🇫 French Polynesia (Tahiti)PF0.00 USD0.00 USD
🇵🇬 Papua New GuineaPG25.00 PGK25.00 PGK
🇵🇭 PhilippinesPH10000.00 PHP10000.00 PHP
🇵🇰 PakistanPK0.00 USD0.00 USD
🇵🇱 PolandPL150.00 EUR22.00 EUR
🇵🇲 Saint Pierre and MiquelonPM0.00 USD0.00 USD
🇵🇳 PitcairnPN0.00 USD0.00 USD
🇵🇷 Puerto RicoPR800.00 USD0.00 USD
🇵🇸 PalestinePS0.00 EGP0.00 EGP
🇵🇹 PortugalPT150.00 EUR22.00 EUR
🇵🇼 PalauPW0.00 USD0.00 USD
🇵🇾 ParaguayPY20.00 USD20.00 USD
🇶🇦 QatarQA3000.00 QAR0.00 QAR
🇷🇪 ReunionRE150.00 EUR22.00 EUR
🇷🇴 RomaniaRO150.00 EUR10.00 EUR
🇷🇸 SerbiaRS0.00 RSD0.00 RSD
🇷🇺 RussiaRU500.00 EUR500.00 EUR
🇷🇼 RwandaRW0.00 USD0.00 USD
🇸🇦 Saudi ArabiaSA1000.00 SAR0.00 USD
🇸🇧 Solomon IslandsSB0.00 USD0.00 USD
🇸🇨 SeychellesSC0.00 SCR0.00 SCR
🇸🇩 SudanSD0.00 USD0.00 USD
🇸🇪 SwedenSE1600.00 SEK0.00 SEK
🇸🇬 SingaporeSG400.00 SGD400.00 SGD
🇸🇭 Saint HelenaSH0.00 USD0.00 USD
🇸🇮 SloveniaSI150.00 EUR22.00 EUR
🇸🇯 SvaldbardSJ0.00 USD0.00 USD
🇸🇰 SlovakiaSK150.00 EUR22.00 EUR
🇸🇱 Sierra LeoneSL0.00 USD0.00 USD
🇸🇲 San MarinoSM22.00 EUR0.00 EUR
🇸🇳 SenegalSN30.00 USD0.00 USD
🇸🇴 SomaliaSO0.00 USD0.00 USD
🇸🇷 SurinameSR0.00 XCD0.00 XCD
🇸🇸 South SudanSS0.00 USD0.00 USD
🇸🇹 Sao Tome & PrincipeST0.00 USD0.00 USD
🇸🇻 El SalvadorSV0.00 USD0.00 USD
🇸🇾 SyriaSY50.00 SYP0.00 SYP
🇸🇿 SwazilandSZ0.00 USD0.00 USD
🇹🇨 Turks and Caicos IslandsTC0.00 USD0.00 USD
🇹🇩 ChadTD20.00 USD20.00 USD
🇹🇫 French Southern TerritoriesTF0.00 USD0.00 USD
🇹🇬 TogoTG400.00 USD400.00 USD
🇹🇭 ThailandTH1500.00 THB1500.00 THB
🇹🇯 TajikistanTJ0.00 USD0.00 USD
🇹🇰 TokelauTK0.00 USD0.00 USD
🇹🇱 Timor-LesteTL0.00 USD0.00 USD
🇹🇲 TurkmenistanTM0.00 USD0.00 USD
🇹🇳 TunisiaTN0.00 TND0.00 TND
🇹🇴 TongaTO0.00 USD0.00 USD
🇹🇷 TurkeyTR0.00 EUR0.00 EUR
🇹🇹 Trinidad and TobagoTT0.00 TTD0.00 TTD
🇹🇻 TuvaluTV0.00 USD0.00 USD
🇹🇼 TaiwanTW2000.00 TWD0.00 TWD
🇹🇿 TanzaniaTZ0.00 TZS0.00 TZS
🇺🇦 UkraineUA150.00 EUR0.00 EUR
🇺🇬 UgandaUG0.00 USD0.00 USD
🇺🇲 United States Minor Outlying IslandsUM0.00 USD0.00 USD
🇺🇸 United StatesUS800.00 USD800.00 USD
🇺🇾 UruguayUY1.00 USD1.00 USD
🇺🇿 UzbekistanUZ1000.00 USD1000.00 USD
🇻🇦 Vatican CityVA0.00 EUR0.00 EUR
🇻🇨 St. VincentVC0.00 XCD0.00 XCD
🇻🇪 VenezuelaVE100.00 USD100.00 USD
🇻🇬 Virgin Islands (British)VG0.00 USD0.00 USD
🇻🇮 Virgin Islands (U.S.)VI0.00 USD0.00 USD
🇻🇳 VietnamVN1000000.00 VND0.00 VND
🇻🇺 VanuatuVU0.00 USD0.00 USD
🇼🇫 Wallis and FutunaWF200.00 XPF0.00 XPF
🇼🇸 SamoaWS0.00 SDG0.00 SDG
🇾🇪 YemenYE0.00 YER0.00 YER
🇾🇹 MayotteYT150.00 EUR0.00 EUR
🇿🇦 South AfricaZA0.00 ZAR0.00 ZAR
🇿🇲 ZambiaZM50.00 USD50.00 USD
🇿🇼 ZimbabweZW10.00 USD10.00 USD

 

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Comments

Thanks for the shout out to Zonos!

Posted by Joshua Aikens | January 6, 2020