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.

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.

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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