Understanding Taxes, Customs Duty and the Declaration of Items on Packages

For any parcel coming into a country, there is a tax or customs duty. These government taxes are a legal requirement that have to be paid before any shipment, or package or parcel is delivered.

Customs Duty offices collect these taxes on shipments according to the regulation levied by each country on import items, aka – stuff which is in your package. And hence, to notify what’s within each parcel, all items have to declared honestly.

Declaring Items in Package

Declaring items in a package is mandatory.

Doing it is slightly tricky, because you know you will be charged for it. Import duties vary from each country. For every item shipped out, the sender needs to provide details of the shipped goods. This is called declaring.

Declaration includes a description, quantity, value and the sender and recipients’ name and address, so that local customs authorities in the receiving party’s country know what import taxes are to applied – i.e. the destination country regulation authority can assess the correct duty. It is a tax that the importer pays to bring goods into his or her country.

Some parcel forwarders allow you to add your information, whereas others will put the description and value from the receipts on the customs declaration which could end up with some additional charges when they deliver it to your doorstep. So watch out for customs duty and your country’s rules and import charges.

In addition to import duty, imports may be subject to other taxes such as sales tax (VAT, GST, etc.), excise duty, or other customs charges like assessing, repackaging. Each country has its set of taxes and different ways of calculating them.

Customs Duty on Gifts

In some cases, if you have the items marked as ‘Gifts’ then there is no customs duty fee since the item is for personal use only. Other special circumstances may include repairs, returns, personal belongings, that are also usually exempted from customs fees and taxes.

De Minimis Value

De Minimis Value is the tax threshold, or the amount where a person begins paying taxes on an item. You should know what the destination country’s de minimis value is so you can make assumptions on the charge bracket you will fall under.

Delivery Duty Paid or Unpaid

DDU or Delivery Duty Paid is a special form of service which when applied means that the sender will be responsible for assessing the item value, declaring it, and then paying it as well. The sender handles the risks and costs of the package which includes all the necessary import duties and any other charges related to delivery.

Sender has to understand

Using Courier Services

Courier services such as FedEx and DHL pay customs on the receiver’s behalf and bill them at the doorstep. The problem in such cases is that the fee may be more than what you thought/calculated and at this point you either need to pay the high fees or get ready to have a long conversation with them. A DDP (delivery duty paid) service by FedEx can help.

Wrap Up

  1. Understand customs fee and be ready to pay. It also helps if you know minimum thresholds for your country.
  2. Understand the risk of using courier services, if there is an option for using local mail / post office for doorstep delivery, then always choose that.
  3. Use DDP if available as an option by your chosen parcel forwarder.

Additional Helpful Resources:

Country Guides: Country guides for imports and customs
Customs Duty Calculator: Free and Paid calculator for declaring customs.


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