International Shipping 101: How Does Customs Clearance Work
When shipping parcels to USA, Japan, Taiwan or other countries, international shipments need to pass through customs clearance and check before arriving its final destination. When it comes to handling customs clearance, it usually scares people away because of the complicated processes and procedures. Check out this guide to understanding the steps of customs clearance and what you’ll need to prepare before shipping out your parcel!
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Understanding Customs Clearance Steps
Step 1: Preparing Customs Clearance Documents
No matter which international courier company you are using, don’t forget to prepare and print out a commercial invoice from the courier when sending out international shipment. Contact details of both the sender and the recipient should be listed on the commercial invoice, along with the send out date and airway bill number of the parcel.
Apart from the basic info, commercial invoice should also contain the details of the items, including the ingredients, materials used, value and the use of the item. This helps with facilitating local customs calculating the payable tax amount.
STEP 2: Tax Calculation by Local Customs
Hong Kong is a free port, meaning there is no payable duties and tax when importing and exporting. When parcels arrive to the destination, local customs will calculate whether it’s necessary to collect duties and tax based on the information provided on the commercial invoice. Different countries have their own way of calculating duties and tax. The basic metrics would be based on the materials used, the categories and the value of the item.
STEP 3: Pay Duties & Tax
When it comes to duties & tax, customs will mark the duty as “Deliver Duty Unpaid — DDU” and “Deliver Duty Paid — DDP”.
If the parcel is marked as “Deliver Duty Paid”, it means that payment of the taxes and duties have already been paid for. Some international courier have their own customs brokers, which help with processing duties payment. The tax payment is usually included with the courier feee.
If the shipment is marked as “Deliver Duty Unpaid”, it means there is an outstanding amount of taxes and duties. Customs officers will inform the recipient about the payment before completing the customs clearance procedures.
STEP 4: Complete Clearance Process
Local customs officers will inform the recipient about tax payment. If the recipient chooses not to pay for the tax, the parcel will be detained. If the parcel returns to the sender, the sender might need to pay for surcharges and courier fee.
Once the tax payment is settled, the parcel will then continue with the courier process and will ship to the recipient’s address.
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