Introduction:

Tackling customs for first time importers can be a nightmare - it's a long process and you would definitely prefer not to deal with it.
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This article will provide you with free resources of all the import related documents you will need and walk you through the process of calculating your tax liability.

CHAPTER 1 - Import Documents

Don't worry, it's not that complicated!

1. Packing List (must have)

What is packing list?  

An itemized list containing product details, as well as the weight dimensions in kilograms (KG) or cubic meters (CBM).

Why do you need it?   

It acts as a checklist for the exporter, customs, or other involved parties to ensure accurate packing of the shipment.

What information does it need?  

A good packing list should contain the following:
 
• Product description
• The type of package(s), e.g. box, carton, vials, etc.;
• Quantity and weight dimensions
• Buyer and seller references
• Commercial Invoice number and/or item number

🎉 Free template - Packing list!  

2. Commercial Invoice (must have)

What is commerical invoice?  

A legal document describing the entire export transaction and the shipping terms - the prices, value of the goods, payment terms, and total invoice value.

Why do you need it?   

Gives the total value of shipment, which is then used to calculate import duties and taxes.

What information does a commercial invoice need to have?   

A good commercial invoice must contain the following:
• Shipping transaction (Date, invoice number, terms of sale)
• Details of goods being transported (refers to packing list)
• Harmonized System codes for those goods (aka HS Code)
• Details of exporter and the receiver  
• Country of manufacturing

🎉 Free template - Commercial Invoice template!  

3. 🚨Important - Declared value!

What is declared value? 

The value placed on the goods by the importers to convey the value of the shipment to freight carrier and custom control.

How is it determined? 

You set the declared value at the Cost of Goods Sold (COGS) (NOT sale value/price). This is basically the price you paid to purchase the goods from the factory.

🚨 Why is it important?  

Your import duties and taxes depend on it!
And if anything is lost or damaged, the declared value will be used in figuring out your compensation.

4. Who will prepare the documents?

Your factories! They will provide both Packing List and Commercial Invoices.

So, what do you ( the importer) need to do? You might need to help your factories gather the necessary information.You also need to ensure there are no mistakes or missing information.

There is NO room for errors in these documents.
‍Customs uses these documents to classify and sort your shipment, as well as calculate duties, so any mistakes will delay your customs clearance.

5. Any other documents?

If you are shipping electronics, cosmetics, or food related products, you will need special certifications. 

What are the special certifications?

‍Product Quality Certification, such as the CCC (China Compulsory Certification), applies to electronic goods ranging from electric tools, low-voltage appliances, wires or cables. 
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If you are shipping battery products or electronics, watch out for these top 3 mistakes to get your products shipped to your door safely. 
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FDA certification (Food and Drug Administration) is required if you’re shipping health food, supplements or formulas to certify the quality of your products. 
But as a general goods buyer, you'll mainly just need the first two - packing list and commercial invoice.

CHAPTER 2 - So, How is import tax and duty calculated?

We will provide you with the formula and resources!

1. Formula

The import tax and duty = total shipment value * tariff rate + import duty

2. How to calculate tax (aka finding tax tariff)

Please download our guide to read more.