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, September 18, 2019.

FlagISOCountryDuty de minimisVAT/tax de minimis
ADAndorra150 EUR22 EUR
AEUnited Arab Emirates1000 AED0 AED
AGAntigua & Barbuda0 USD0 USD
AIAnguilla0 XCD0 XCD
ALAlbania100 USD100 USD
AMArmenia300 USD300 USD
AOAngola100 USD100 USD
ARArgentina0 ARS0 ARS
ASAmerican Samoa0 USD0 USD
ATAustria150 EUR22 EUR
AUAustralia1000 AUD1000 AUD
AWAruba0 USD0 USD
AZAzerbaijan0 USD0 USD
BABosnia & Herzegovina150 EUR0 EUR
BBBarbados0 BBD0 BBD
BDBangladesh0 BDT0 BDT
BEBelgium150 EUR22 EUR
BFBurkina Faso0 USD0 USD
BGBulgaria150 EUR15 EUR
BHBahrain0 BHD0 BHD
BIBurundi0 USD0 USD
BJBenin50 USD50 USD
BLSt. Barthelemy0 EUR0 EUR
BMBermuda0 BMD0 BMD
BNBrunei Darussalam0 BND0 BND
BOBolivia1000 USD1000 USD
BQBonaire, St.Eustatius & Saba100 USD100 USD
BRBrazil0 BRL0 BRL
BSBahamas0 USD0 USD
BTBhutan0 INR0 INR
BWBotswana0 BWP0 BWP
BYBelarus0 USD0 USD
BZBelize0 BZD0 BZD
CACanada20 CAD20 CAD
CFCentral African Republic20 USD0 USD
CGCongo12 USD12 USD
CHSwitzerland0 CHF0 CHF
CIIvory Coast20 USD20 USD
CKCook Islands0 NZD0 NZD
CLChile30 USD0 USD
CMCameroon400 USD400 USD
CNChina, People’s Republic of5000 CNY0 CNY
COColombia0 COP614400 COP
CRCosta Rica50 USD50 USD
CVCape Verde200 USD200 USD
CWCuraçao100 USD100 USD
CYCyprus150 EUR17 EUR
CZCzech Republic150 EUR22 EUR
DEGermany150 EUR22 EUR
DJDjibouti0 DJF0 DJF
DKDenmark1150 DKK80 DKK
DMDominica0 USD0 USD
DODominican Republic200 USD200 USD
DZAlgeria0 USD0 USD
ECEcuador10 USD0 USD
EEEstonia22 EUR22 EUR
EGEgypt0 EGP0 EGP
EREritrea100 USD0 USD
ESSpain150 EUR22 EUR
ETEthiopia25 EUR25 EUR
FIFinland150 EUR22 EUR
FJFiji200 FJD200 FJD
FMMicronesia, Federated States of0 USD0 USD
FOFaroe Islands (Denmark)80 DKK80 DKK
FRFrance150 EUR22 EUR
GAGabon10 USD10 USD
GBUnited Kingdom135 GBP15 GBP
GDGrenada0 USD0 USD
GEGeorgia170 USD170 USD
GFFrench Guiana22 EUR22 EUR
GGGuernsey0 EUR0 EUR
GHGhana5 USD0 USD
GIGibraltar0 USD0 USD
GLGreenland (Denmark)80 DKK80 DKK
GMGambia100 USD100 USD
GNGuinea15 USD15 USD
GPGuadeloupe150 EUR22 EUR
GQEquatorial Guinea200 USD0 USD
GRGreece150 EUR22 EUR
GTGuatemala0 USD0 USD
GUGuam0 USD0 USD
GWGuinea-Bissau100 USD0 USD
GYGuyana100 USD100 USD
HKHong Kong0 USD0 USD
HNHonduras0 USD0 USD
HRCroatia150 EUR22 EUR
HTHaiti0 USD0 USD
HUHungary150 EUR22 EUR
ICCanary Island, Spain150 EUR22 EUR
IDIndonesia75 USD75 USD
IEIreland150 EUR22 EUR
ILIsrael75 USD75 USD
INIndia0 INR0 INR
IQIraq0 USD0 USD
ISIceland0 ISK0 ISK
ITItaly150 EUR22 EUR
JEJersey0 GBP0 GBP
JMJamaica0 USD0 USD
JOJordan20 USD20 USD
JPJapan10000 JPY10000 JPY
KEKenya0 USD0 USD
KGKyrgyzstan120 USD120 USD
KHCambodia0 KHR0 KHR
KIKiribati0 USD0 USD
KMComoros0 USD0 USD
KNSt. Kitts and Nevis0 USD0 USD
KRKorea, The Republic of150000 KRW150000 KRW
KWKuwait0 USD0 USD
KYCayman Islands50 USD50 USD
KZKazakhstan1000 EUR1000 EUR
LALaos0 LAK0 LAK
LBLebanon950 USD950 USD
LCSt. Lucia0 USD0 USD
LILiechtenstein5 CHF5 CHF
LKSri Lanka0 LKR0 LKR
LRLiberia0 USD0 USD
LSLesotho0 USD0 USD
LTLithuania150 EUR22 EUR
LULuxembourg150 EUR22 EUR
LVLatvia150 EUR22 EUR
MAMorocco30 USD30 USD
MCMonaco150 EUR22 EUR
MDMoldova300 EUR300 EUR
MEMontenegro75 EUR0 EUR
MFSt. Maarten100 USD0 USD
MGMadagascar20 USD20 USD
MHMarshall Islands0 USD0 USD
MKMacedonia22 EUR22 EUR
MLMali20 USD20 USD
MMMyanmar500 USD0 USD
MNMongolia0 MTG0 MTG
MOMacau0 MOP0 MOP
MPNorthern Mariana Islands0 USD0 USD
MQMartinique150 EUR22 EUR
MRMauritania25 USD25 USD
MSMontserrat0 USD0 USD
MTMalta150 EUR22 EUR
MUMauritius500 MUR500 MUR
MVMaldives0 MVR0 MVR
MWMalawi0 MWK0 MWK
MXMexico1000 USD50 USD
MYMalaysia500 MYR0 MYR
MZMozambique30 USD30 USD
NANamibia0 USD0 USD
NCNew Caledonia0 USD0 USD
NENiger20 USD0 USD
NFNorfolk Island50 USD0 USD
NGNigeria20 USD20 USD
NINicaragua0 NIO0 NIO
NLNetherlands150 EUR22 EUR
NONorway40 USD40 USD
NPNepal0 NPR0 NPR
NZNew Zealand0 NZD0 NZD
OMOman0 USD0 USD
PAPanama20 USD20 USD
PEPeru0 USD0 USD
PFFrench Polynesia (Tahiti)0 USD0 USD
PGPapua New Guinea25 PGK25 PGK
PHPhilippines10000 PHP10000 PHP
PKPakistan0 USD0 USD
PLPoland150 EUR22 EUR
PRPuerto Rico800 USD0 USD
PTPortugal150 EUR22 EUR
PWPalau0 USD0 USD
PYParaguay20 USD20 USD
QAQatar3000 QAR0 QAR
REReunion22 XEU22 XEU
RORomania150 EUR10 EUR
RSSerbia0 RSD0 RSD
RURussia0 EUR0 EUR
RWRwanda15 USD15 USD
SASaudi Arabia266 USD0 USD
SBSolomon Islands0 USD0 USD
SCSeychelles0 SCR0 SCR
SESweden1600 SEK0 SEK
SGSingapore400 SGD400 SGD
SISlovenia150 EUR22 EUR
SKSlovakia150 EUR22 EUR
SLSierra Leone0 USD0 USD
SMSan Marino22 EUR0 EUR
SNSenegal30 USD0 USD
SRSuriname0 SRG0 SRG
SVEl Salvador0 USD0 USD
SYSyria50 SYP0 SYP
SZSwaziland0 USD0 USD
TCTurks and Caicos Islands0 USD0 USD
TDChad20 USD20 USD
TGTogo400 USD400 USD
THThailand1000 THB1000 THB
TLTimor-Leste0 USD0 USD
TMTurkmenistan0 USD0 USD
TNTunisia0 TND0 TND
TOTonga0 USD0 USD
TRTurkey75 EUR75 EUR
TTTrinidad and Tobago0 TTD0 TTD
TVTuvalu0 USD0 USD
TWTaiwan3000 TWD0 TWD
TZTanzania0 TZS0 TZS
UAUkraine150 EUR0 EUR
UGUganda50 USD50 USD
USUnited States800 USD800 USD
UYUruguay1 USD1 USD
UZUzbekistan1000 USD1000 USD
VAVatican City0 EUR0 EUR
VCSt. Vincent0 XCD0 XCD
VEVenezuela100 USD100 USD
VGVirgin Islands (British)0 USD0 USD
VIVirgin Islands (U.S.)0 USD0 USD
VNVietnam45 USD45 USD
VUVanuatu0 USD0 USD
WFWallis and Futana200 CFP0 CFP
WSSamoa0 USD0 USD
YEYemen0 YER0 YER
YTMayotte22 EUR0 EUR
ZASouth Africa0 ZAR0 ZAR
ZMZambia50 USD50 USD
ZWZimbabwe10 USD10 USD

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