There has a tax or tax free statement during custom clearance when foreigners shipping packages via international courier services or China Post from China to overseas countries. How to reasonably avoid custom tax is one of the biggest concerns for foreigner especially small sellers. According to the Customs management principles on inbound and outbound personal postal parcels by different countries in the world, the customs has to facilitate the reasonable needs of the individuals, but also to limit the smuggling activities. Customs in each country regulated the value, tax free amount, types of prohibited and restricted goods in the packages. Customs inspects the inbound packages, tax and tax free release according to the principle. If the mailing goods commodity value (declared value) exceeds the tax-free amount of the destination country, the goods maybe taxable goods and generally will be charged tariff according to the custom law.

How to avoid tariffs on international courier packages shipping from China

The customs duty issue is an inevitable issue in foreign trade business especially small or middle online sellers like Amazon FBA seller. For example, when a small package which has less value shipping from China via international express delivery service to destination countries, it was told by customs to pay a very reciprocal tariff fee which is beyond its actual value. When this situation occurs, foreigners need to pay the custom tax or return packages or withheld in the customs and being destroyed. In addition to loss the shipping fee, the package delivery will be delayed and customer experience will be affected also. So, how to maximally avoid or cut down the customs duty? There are 6 useful tips to help foreigners avoid customs tax on packages shipping from China.

1. Declare value amount

The tax free amount of customs in each country is different, foreigners may fill the declare value amount according to the national customs terms. For example, in some countries, the customs inspection will be more stringent on packages declared value above 30 USD, so we recommend try to keep the declared value within 30 USD to avoid customs tax. If the declared value higher, then the recipient may have to pay high duty. In addition, there will be more stringent in custom clearance, it often lead to package being withheld in customs and the recipient may be required to provide relevant commercial invoice. So lower down declare value is a good way to avoid custom tariffs.

2. Divide package into several small packages deliver to different addresses

When ship packages via international courier service, foreigners can get a few receipt addresses in the city and divide the goods in several packages deliver to different addresses to avoid custom duty. Of course the addresses should not be far in order to facilitate receipt. Or separately mail the packages to avoid customs tax. For example, if foreigners need to ship several packages from China to the same receipt address, you’d better distinguish the packages with different packaging or colors to avoid customs duty.

3. Deviates the delivery time

Foreigners could deliver goods in several days via the international courier service, send a few packages each day to avoid customs fee, each shipment can be determined in accordance with specific declared value. Usually it is suggest 2 large boxes each time.

4. Restrict single package weight to avoid customs tax

When using international express delivery service shipping goods from China, the single package box weight is preferably not exceeding 20 kg, usually between 10 to 20 kg.

5. Keep the best delivery cycle to avoid custom tariffs

Each shipment time interval should be than two days or even more when shipping goods from China via international express service. It is generally recommended to complete custom clearance of last package goods, and then send the next batch of goods to avoid customs fee.

6. Try different international express courier packaging to avoid custom tax

The international express courier carton need to be square and it is best to be blank. No more variety of patterns or text on the carton surface. Try different colors with different standard carton box to avoid customs tax if foreigners need to ship several packages to the same receipt address at the same day.

There are 6 useful tips on how to avoid customs fee when shipping goods from china.

Customs tax standard for different countries

Foreigners can check the latest customs tax standard on the official customs website of the country.

General tax fee knowledge

1. Tax fee

Usually Tax fee include customs fee and VAT, the VAT rate is different in different countries. For example, VAT rate is 20% in UK, 10% in Australia while there is no VAT in the USA. In addition, the same product with different materials has different tariff rates and the same product customs rate is different in different countries. The VAT charge should base on CIF which means it should include customs fee and shipping fee. There is the tax calculation formula:

UK: Tax fee= customs fee+ VAT (20%)

Customs fee= product value* tariff rate

VAT= (product value+ customs fee+ shipping fee)* 20%

USA: Tax fee= customs fee=product value* tariff rate

AUS: Tax fee= customs fee+ GST (10%)

Customs fee= product value* tariff rate

GST= (product value+ customs fee+ shipping fee)* 10%

2. Tax rates

The Tax Rate include base tax rate and WTO tax rate, the WTO tax rate refers to MFN (Most-favored nation) tax rate. It means the tax rate of a country imports products from its MFN. MFN is is an important provision in the General Agreement on Tariffs and Trade. According to this provision, the Contracting States to each other given third countries preferential, immunities and privileges in trade also give the other contracting party. It is the MFN rate in customs rate and it is reciprocal tariff concessions.

3. Preferential tax rate

It refers the preferential tax rate is lower than the general rate of importing goods from a particular beneficiary country, usually it is reciprocal. The preferential tax rate includes GSP preferential margins and FTA discount rate. The first one is a preferential tax rate from developed countries to developing countries. It is deducted from the MFN tax rate, thus it is the lowest tax rate and it is one-way, non-reciprocal tariff. The second one is a regional trade arrangement appear in preferential arrangement and FTA forms, tax rate in this area is more favorable than MFN tax rate.

After knowing the tax rate policy in different countries, foreigners can take the related strategy flexiblely to avoid or reduce customs tax fee under the assistance of the international forwarder shipping agent when shipping packages from China.

AD：【TaobaoGuides】The best Taobao forwarder shipping agent

Articles may not be reproduced without permissionTaobaoGuides » How to avoid customs tax on packages shipping from China