Learn everything you need to know about duties and taxes!
Whether you’re a small business, an individual seller, or a customer, it is essential to understand how duties and taxes may affect your international order. Importers and potential customers are required to pay specific fees which may go beyond the cost of simply buying the same item in your own country.
Understanding these costs and obligations can help save money and ensure imports meet requirements — from quarantines to customs clearances — when they arrive in their destination country.
Shipito, a package forwarding company, provides additional insight and answers some frequently asked questions regarding duties and taxes on internationally shipped packages.
In this blog post, we will discuss what duties and taxes on imports are so that you can understand how they may affect you when ordering goods from abroad.
What Are Import Taxes?
Import taxes, also known as customs duties, are charges applied to goods and services imported into a country. They are an essential source of revenue for the government and prices of imported items often include these taxes.
Depending on the type of item, these taxes can vary widely between countries and regions. Even within a country, variations exist within different territories or provinces.
Import taxes may also take different forms; some may be fixed amounts, while others are calculated as a percentage of the cost of the imported goods. Ultimately, the tax on imported goods exists to help protect businesses in the host country from outside competition and encourage local production.
Standard Tax Terms and Types
Whether you use an international package forwarding, mail forwarding, or parcel forwarding service, like Shipito, understanding the types of taxes and fees associated with importing can help you manage your budget better. Here are some standard terms to familiarize yourself with when ordering goods from abroad:
- Import Duty: An import duty is a tax imposed on imports entering a country. It is used to protect domestic industries from foreign competition and to generate revenue for the government. It makes imported goods more expensive than their locally produced competitors, influencing consumer decisions.
- GST: Goods and services tax (GST) is a type of value-added tax (VAT) imposed on goods imported into a country. This tax is based on the value and quantity of the imported goods and must be paid before the goods can be cleared through customs.
- De Minimis Value: The de minimis value is the maximum value of goods that can be imported into a country without being charged additional taxes or duties.
- Excise Tax: An excise tax is a tax imposed on certain goods and services considered harmful to society, such as alcohol, cigarettes, and fuel.
Knowing the applicable taxes and fees on imported goods can help you optimize your savings when purchasing items from abroad.
Incoterms, or “international commercial terms,” are rules and regulations that govern international trade transactions. These rules are carefully crafted to ensure that all participants in the transaction understand their respective roles and responsibilities when goods are shipped.
Incoterms define the methods of payment and delivery, as well as who pays duties and taxes. By clearly understanding incoterms, buyers and sellers can better manage their trading activities with less risk of disputes or misunderstandings, thereby helping to promote the success of any cross-border commerce.
Knowing these terms can help minimize confusion, assist with payment requirements, define delivery periods and provide a legal framework for efficiently resolving disputes.
B2C companies will encounter the following incoterms:
- DDP: Deliver duty paid (DDP) is an incoterm in which the seller assumes all responsibility for paying import duties and taxes.
- DDU: Deliver duty unpaid (DDU) is an incoterm in which the buyer is responsible for paying any applicable import duties and taxes.
How Are Duties and Taxes Calculated on Imported Goods?
Generally, the rate of duty and tax applied depends on various factors such as product type, the value of an item, its country of origin, and any existing trade agreements between countries. Rates can range from no taxes or fees to very high percentages that must be paid for goods.
As prices and policies vary widely from country to country, it pays to do a little research before starting an international purchase.
What To Expect When Shipping Internationally
Shipping internationally can be daunting; however, the process can be manageable. Knowing what to expect in advance makes the experience more convenient.
Customers shipping internationally should consider the potential language barriers, transportation times, and customs regulations associated with moving goods over international borders. Understanding these factors will help anticipate any issues that may come up and help define strategies for addressing them.
Additionally, customers should research their shippers and understand their services before initiating the international shipping process. With adequate information and preparation, the experience of sending goods overseas can be a positive one.
Shipito can ease these worries and even provides details on the rules and conditions of the shipping providers in your country. Click here to learn more.
How Shipito Helps With International Shipping
Shipito is an international mail forwarding service that simplifies the process of shipping to and from countries around the world. We offer a streamlined service that allows users to shop for items in the U.S. and ship anywhere in the world without spending a fortune or dealing with inconvenient bureaucracy.
Our shipping calculator makes it easy for customers to determine the shipping cost from anywhere in the world. Our international parcel forwarding can help customers save money on their overseas purchases.
Whether you need to ship from the U.S. to Australia or need a package forwarding service from the U.S. to Canada, Shipito can help you get the job done quickly and affordably. With us, you can easily order products in the U.S. and deliver them to virtually any global destination. Shipito can even fill out your Customs Declaration Form for you when the invoice is included with your package.
Importing and receiving packages from abroad can be tricky, so it pays to understand the international shipping and delivery process clearly.
To ensure your goods arrive safely and securely at their destination, you must familiarize yourself with incoterms, customs regulations, and other factors involved in shipping internationally.
At Shipito, we make it easy to get the U.S. products you need, regardless of where you live. Our international package forwarding and mail forwarding services provide customers with a comprehensive solution for their shipping needs. With our Shipito for Business membership, experts will help your business expand internationally and streamline your processes.
With Shipito as your go-to partner, customers can confidently shop and ship. Sign up today and start reaching your international shipping goals!
If you have any further questions regarding duties, taxes, or customs declarations, please contact us via our live chat, email us at email@example.com, or call us at +1 (310) 349-1182.