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Guide to VAT & Duty

Upon importing to a country there may be duty and VAT liability for that import. Some countries will have declared thresholds at which duty and VAT may become applicable – this varies from country to country.

For example, the USA currently has a duty and tax threshold of US $800 meaning anything below that value will not be liable for duty and tax. Other countries may be lower such as Canada where that limit is set at CAN $20. How this is managed and calculated will vary from destination to destination.

Some destinations such as the UK currently* will charge VAT only for goods declared between £15.00 and £134.99 and will only calculate Duty should the value of the products in the order equate to or exceed £135.00.

Pro Carrier will facilitate the declarations and customs clearance as part of our end to end service proposition. Pro Carrier via the Pro Carrier Duty Calculator can help our customers to predetermine what duty and tax will be levied by destination and by product. Please do not hesitate to contact us for further information.

*From January 1 2021 the £15.00 VAT threshold will be removed so all values will be subject to VAT.

To assist with the customs declaration process and the accuracy of the calculations it is imperative that the data we are provided with is as meaningful and accurate as possible:

  • Accurate HS codes (preferably 10 digit but 6 digit will be accepted)
  • Good descriptions of the product – SKU number included wherever possible
  • Value for customs purposes – if a separate cost for shipping is not included it is assumed for customs purposes that it is built into the declared cost of the products
  • Licence numbers if required – for example FDA registered products being shipped to the USA
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  • Duties & Taxes Explained
    • Whether a shipment is a gift or not, it must still go through an import procedure as determined by customs law in the destination country. The shipment is cleared through customs based on the origin country, the value and quantity, but not its purpose or intended use. Dutiable shipments are subject to a customs duty, which is a tariff or tax imposed on goods when transported across international borders.
    • The calculation of duties depends on the assessable value of a dutiable shipment. For the purpose of this calculation, dutiable goods are given a classification code that is known as the Harmonized System code.
    • This system has been assigned by the World Customs Organization and continues to evolve. Pro Carrier can assist with this process – please contact your account manager for additional information or see Pro Carrier HS code classification.
    • The payment of duties and taxes is the responsibility of either the receiver (DDU) or the sender (DDP). With DDP, after shipment delivery, Pro Carrier invoices the shipper for the duties and taxes we paid on their behalf at destination, plus a small administration fee.
  • VAT Explained

    Rates of VAT will vary from destination to destination.

    What is the value for VAT?

    The value for VAT is the declared value of the goods plus the transport costs to the country of destination plus, where applicable, the Customs Duty.

    Example of Duty calculation

    Goods = 2 special edition CD sets

    Value of goods £80 + Transport to the destination £35

    Total value for Duty £115 x 3.5% Duty = Total Duty payable £4.02

    Example of VAT calculation

    Value of goods £80 + Transport to the UK £35 + Duty charges £4.02

    Total value for VAT £119.02 x 20% = Total VAT payable £23.80

    Therefore the total import Duty and VAT charges payable on import of these goods would be £27.82.

  • VAT registration assistance

    Pro Carrier, whilst being experts at understanding the logistical requirements to deliver your parcels, do not claim to be experts at understanding the complexities of VAT registration and VAT drawbacks etc.

    To that end, we are pleased to share with you that we are working with Vatglobal to ensure our customers are getting the best advice possible. Vatglobal is a VAT/GST Compliance and Advisory business, responsible for managing multi- jurisdictional VAT registrations, compliance and reporting – with expertise and ability to assist on VAT matters in over 50 countries around the world. Vatglobal runs all of its compliance services out of one office in the UK, making it a true ‘one stop shop.’ The structure ensures that all compliance matters are handled under one central location thus providing a true centralised solution to clients.
    The London based VAT compliance hub is supported by an extensive global network of offices and resources, supporting in excess of 16,000 clients in over 100 countries. These clients range from small and medium- sized enterprises to large multi-national corporations, across a wide range of sectors. That expertise is supplemented by digital tools, making compliance more efficient and error-free.

    If you would like an introduction to Vatglobal, please feel to contact us and we are more than happy to make that introduction for you.

Download our Guide to VAT & Duty Pack

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