Customs is a place feared by every importer, but when we get to know the terrain a little better we will see that this fear is quite unjustified. As we explained in a previous post, two of Customs’ main duties are to collect duties and to monitor goods. Let’s see now what are the typical events during this transit and how to avoid problems as much as possible:
Payment of fees. This tax depends on each product and country, therefore we must consult which is the tariff for what we are importing.
-The supplier gives us an “HS code” that indicates what type of product it is. We then use a tool to find out the tariff ->
Tariff calculation for the European Union
.
-We then apply this tariff to the cost of the product + transport.
If we want to avoid problems in this part of the operation, we must be honest. We must declare exactly what we are transporting (not falsify it to try to be charged a cheaper tariff).
Nor can you put a cheaper cost than the real cost so that tariffs are lower. In this case we risk an inspection (point 4) and things will get ugly. In addition, if we try to pass through customs products well below their cost, we may be accused of dumping.
2. VAT collection (in other countries ITBMS, IV, ITBIS, IGV, etc.). If we are going to import from China to sell later, this step is irrelevant because the VAT will be deducted.
VAT is applied to the cost of the product + transport + duty. We should not calculate VAT only on the value of the product or we will be making a major mistake.
3. Customs clearance costs. These are a series of expenses incurred for cargo handling at the port, paperwork, insurance (in Spain it is usually 0.45% of the invoice value) and other small charges. In total they should be around 250-350US$.
These costs depend on the port and country of destination, so they vary depending on where you are importing to.
We must warn that if our cargo is stopped at customs we will have to face unforeseen costs, it is inevitable.
4. Inspection of the goods. It occurs randomly, or when the cargo or documentation is suspicious.
In the first case, we have nothing to do. From time to time they stop goods as a matter of routine or because they are ordered to inspect a certain type of product for a certain season.
However, we can save ourselves problems if we do our homework properly. The goods should be as detailed as possible so as not to arouse suspicion.
Example: We are importing electronic components. If the packing list says:
-5 boxes of electronic components -> Bad
-3 boxes of electrolytic capacitors C232, 2 boxes of 100ohm resistors -> Better
The supplier is responsible for providing the detailed information, but if you hire an intermediary company, it will check everything beforehand and avoid unpleasant surprises.
Lying with the price of the merchandise also gives a lot of chances to end up in an inspection. Always being honest will save us half the trouble. The other half depends on luck and hiring the right people.
In short, we could have 5 cases on inspection issues:
a. No problem. Container shipped
b. Document review. If we have been honest and everything is in order, nothing will happen.
c.Take a sample of the container (positioned). This will inevitably cost us about 75US$.
d. Scanning of the container. Around 90US$.
e. Complete emptying of the container. We are responsible for the cost of the operation, which is about 600US$. If this happens to us, too bad. There is no way to avoid paying it.
I hope it has helped you to better understand how customs work when importing. Do not hesitate to leave comments if you have doubts or want to contribute new views on the subject.
