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What are import Duties and Taxes?


Import duties and taxes are crucial components of international trade, influencing the cost and regulatory landscape for businesses involved in the importation of goods. Understanding these concepts is essential for both importers and exporters to ensure compliance with customs regulations and facilitate seamless cross-border transactions.

Definition of Import Duties and Taxes

Import duties, often referred to as tariffs, are taxes imposed by governments on imported goods. These duties are calculated based on the value, quantity, or weight of the imported items. Taxes, on the other hand, encompass various levies, including Value-Added Tax (VAT) or Goods and Services Tax (GST), which are applied to the value of the imported goods.

Calculate and Application

Import duties are calculated as a percentage of the customs value of the goods, which includes the cost of the goods, shipping, and insurance. These duties are intended to protect domestic industries, regulate trade, and generate revenue for the importing country. Taxes, such as VAT or GST, are applied to the total value of the imported goods, including the cost of the goods, shipping, and any applicable duties. Here at EasyParcel, we provide a hassle-free calculation feature for our users to prepare an estimated amount of tax and duties before they make parcel bookings. Users can utilize the tax calculator anytime they want.

Customs declarations and documentation

To determine the applicable import duties and taxes, accurate and detailed customs declarations are crucial. Importers must provide comprehensive documentation, including the commercial invoice, packing list, and any additional certificates or permits required by customs authorities. The accuracy of these documents is essential for the proper assessment of duties and taxes.

Classification and Harmonized System (HS) code

Goods are classified for customs purposes using Harmonized System (HS) codes, an internationally recognized system for categorizing products. Each HS code corresponds to a specific product category, and it determines the applicable import duties. Importers must correctly classify their goods to ensure accurate calculations of duties and taxes. When booking international delivery at EasyParcel, there's a designated space to enter the HS code so users can ship with ease.

EasyParcel is the author of this solution article.

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