International Shipping Duties and Taxes: A Comprehensive Guide

While international shipping can be a great way to get access to a wider variety of goods, understanding the complex world of duties, taxes, and associated hidden costs can feel like you are decoding a foreign language. Seems like a challenge, right? No worries, as this comprehensive guide and the expert team at Stackry will equip you with the knowledge you will need to confidently estimate overseas shipping expenses and avoid any unwelcome surprises.

Important International Shipping Terms

Before we begin, let’s have a look at some of the key terms you may come across for international shipping.

Duties

A tax imposed by a country on imported goods- is often based on a percentage of their value and categorized by the Harmonized System or the HS Code- a universal system for classifying internationally traded goods. To put it simply, it is like a giant product encyclopedia with specific codes for each item.

Taxes

Often referred to as Value Added Tax (VAT) or Goods and Services Tax (GST), these are consumption taxes levied on the value of imported goods and may include any duties applied. In other words, VAT or GST is like a sales tax specific to imported items.

De Minimis Value

A threshold set by a country below which imported goods are generally exempt from duties and taxes. Consider it a small value, with no tax rule, but the exact value may vary by country.

Calculating Duties and Taxes

The exact amount you will owe in the form of duties and taxes depends on quite a few factors. Let’s have a look

Customs Declared Value

This is the total value of your shipment and generally includes the cost of the items, insurance, and shipping charges. In simple terms, it is the sticker price of your entire package.

HS Code

As mentioned earlier as well, this code determines the specific duty rate applied to your goods. Researching the HS code of your items in advance can be a helpful step. You can often find the HS code on the product description or by contacting the seller.

Destination Country

Different countries have varying duty and tax rates. You can research the specific rates for taxes and duties according to the destination country.

How to calculate import duty

Here is a formula for estimating your probable duty cost:

Duty = (Customs Declared Value x Duty Rate based on HS Code) / 100

It is pertinent to mention that this is just an estimate, and additional taxes like VAT or GST may also apply, thereby impacting the final amount.

Do You Owe? Determining Duties and Taxes

There are a few ways to determine if you will possibly owe duties and taxes.

For instance, you can check the de minimis value of the destination country. If your shipment’s customs-declared value falls below this threshold, you might be exempt from duties and taxes. For instance, Canada has a de minimis value of CAD$20, so if your shipment to Canada is worth less than CAD$20, you likely would not owe duties or taxes.

You may also research the destination country’s customs website. Most countries have online resources that outline their duty and tax rates for various HS codes. These websites can be a valuable source of information but do not be discouraged if they seem a little official or challenging to navigate.

Finally, you can use online duty and tax calculators. Several websites feature calculators that can provide estimates based on your shipment details. These calculators can be a handy starting point.

Choosing the Right Partner for Your International Shipping Needs

While working around the intricacies of international shipping can seem like a daunting task, there are valuable resources available to make the process easier. Many international shipping companies specialize in simplifying customs clearance and can provide guidance on duties and taxes. These companies can serve as your partner in international shipping, help you cope with the complexities, and also save you time and money.

Stackry offers a variety of services to streamline the process of international shipping. For the majority of shipments processed through Stackry, duties and taxes are paid upon delivery in your home country. This facilitates transparent pricing and avoids any unwelcome surprises at checkout. However, there are a small number of countries and carriers where duties and taxes must be collected upfront. In these cases, Stackry will clearly outline the applicable fees before you complete your shipment.

When you partner with Stackry, you get to leverage our expertise in international customs regulations. We can assist you in estimating duties and taxes, ensure accurate customs declarations, and guide you through the entire shipping process.

So, the next time you shop from the US, let Stackry handle the complexities behind the scenes while you enjoy buying things you love. With a little knowledge and the right partner by your side, you can enjoy international shipping and bring home some special finds without any unwanted surprises.