Prepare Shipping Documents
It is very important to consider the effects of duties, taxes, port handling fees and other customs charges when determining your shipment's total shipping charges. Depending on the content and the destination country, customs charges will affect the price your recipient is willing to pay for your product. Being able to calculate and communicate the "landed" cost upfront often save yours and your recipient's valuable time and money.
Duties and Taxes
Almost all shipments crossing international borders are subject to the assessment of duties and taxes imposed by the destination country's government. This is done to generate revenue, protect local industries against foreign competition, or both. The duties and taxes normally must be paid before the goods are released from customs. A shipment's duty and tax amount may be based on:
Customs officials assess duties and taxes based on the declared value and the commodity descriptions provided on the FedEx International Air Waybill and the Commercial Invoice.
Value Added Tax (VAT) / Goods & Services Tax (GST)
A VAT is a form of indirect tax applied to the value of a product. In some countries, including Singapore, Australia, New Zealand and Canada, this tax is known as goods and services tax, or GST. Because it's a tax on consumer expenditure, businesses that are VAT-registered and fully taxable do not bear the final costs of VAT. Every member state of the European Union (EU) has a VAT.
Responsibility for Paying Duties and Taxes
Duties and taxes on your international shipment will automatically be billed to the recipient*, unless the shipper instructs FedEx otherwise. The shipper can usually select either the shipper, recipient or a third party as the payer when you complete the FedEx International Air Waybill or FedEx Expanded Service International Air Waybill. When the recipient is the payer, the FedEx office in the destination country will, in most cases, call to collect or invoice the duties and taxes that have been assessed. We do this to recover the funds that we have advanced on the payer's behalf.
* If the designated recipient refuses to pay the duties and taxes, shipper will be liable to pay any outstanding charges.
Gathering Duty & Tax information
To determine duty and tax information for your shipment is to identify the HS code associated with your product. To find the importing country's HS code is to use the Online Tariff Database at http://www.worldtariff.com/
Gift Exemption for Duties and Taxes
To qualify for a gift exemption, your shipment must meet the following requirements:
- It must be sent person to person - with no company involvement or indication of involvement on the shipping documentation.
- The shipping documentation must clearly be marked "Unsolicited Gift" in addition to the commodity* name and the detailed description.
- The total value of the shipment must not exceed the values prescribed by the customs.
*Except dutiable commodities
For more information on gift exemptions, please call FedEx Customer Service.
Declared Value and Duties and Taxes
Customs officials use a shipment's declared value - the value the shipper declares on the goods being shipped - along with the description of the goods, to determine duties and taxes. This means it's very important to make sure that the declared value on the air waybill and commercial invoice is accurate. Inaccurate declared value is one of the most prevalent reasons for duty and tax disputes. A shipment's declared value represents the selling price or fair market value of the contents of the shipment, even if not sold (e.g. textile samples). This value is identified on the FedEx International Air Waybill and the FedEx Expanded Service International Air Waybill as the "Total Value for Customs" and must agree with the value shown on the Commercial Invoice.
Temporary imports are goods imported for a specific purpose, then either exported back to the country of origin or destroyed. Examples of such shipments include goods to be repaired, trade show displays and tools of trade. Temporary Import Bonds are acceptable under FedEx International Broker Select Option, for initial import only.
Processing a temporary import. Special procedures and documentation are often necessary to properly process a shipment that is to be imported temporarily. The procedures vary depending upon a number of factors including:
- The origin and destination of the shipment.
- The classification of the goods.
- The value of the goods.
- The origin of the goods (country of manufacture)
Problems with Temporary Import Bond (TIB) shipments.
The two most common errors concerning TIB shipments are:
- The failure to indicate on the shipping documentation that a Temporary Import Bond is required.
- The failure to properly document the export or destruction of the articles. When this happens, the bond or security deposit is forfeited, and the importer bears the duty and tax expense.
FedEx Ancillary Service Fees for Special Clearance
FedEx may apply surcharges to shipments when ancillary clearance services are provided. These services involve additional time or expense to clear an import shipment due to the commodities being imported. Or there may be special brokerage processing fees imposed by the regulatory agency for regulatory filing or by the customs broker. These fees are subject to change without notice and are billed per the instructions on the FedEx International Air Waybill.
Checklist to Ensure a Dispute-Free Experience
- Make sure that the Commercial Invoice and all other international shipping documents are completed accurately and consistently. The Commercial Invoice is the first international shipping document you should complete, since it is the foundation document for all others and is the most common customs document required for clearing international shipments. Include the following required information:
- Shipper's information: Contact name, company name, full address, telephone number and business registration number.
- Recipient's information: Contact name, company name, full address and telephone number.
- International air waybill number.
- Country of manufacture: The country of original manufacture for each item in the shipment.
- Accurate and detailed description of shipment contents, including (but not limited to):
- What the item is.
- What material the item is made of
- What the HS code for the item is
- The item's intended use
- The part or serial numbers
- The item's value per unit and in total
- Make sure that the FedEx International Air Waybill or FedEx Expanded Service International Air Waybill properly reflects the correct declared value for customs.