Freight Shipping between China and Cambodia | Rates – Transit times – Duties and Taxes

How to calculate duties & taxes when importing from China to Cambodia?

Navigating the labyrinth of customs duties can be complex, yet with a little guidance, it can be simpler than you think. When calculating your customs duties, it's important to know five key things: the country of origin, the HS Code of your product, the Customs Value, the Applicable Tariff Rate, and any other taxes and fees that may apply. Keep in mind, your journey through import duties and taxes begins by identifying the country where your goods were manufactured or produced. This fundamental step sets the stage for the ensuing duties calculation, helping you steer clear of unexpected costs and shorten your cargo's time in customs on its way from China to Cambodia.

Step 1 - Identify the Country of Origin

Recognizing the Country of Origin might appear obvious, yet it carries significant weight for five primary reasons.

First, it lays the groundwork for proper tax and duty estimation. The taxes you'll encounter hinge on this identification process, making it a key part of importing goods.

Second, it asserts eligibility for tariff exemptions. For instance, the ASEAN-China Free Trade Agreement could cut customs duties drastically if you prove that your goods originated in China.

Third, it ensures your goods aren't subject to import restrictions. Cambodia maintains a list of commodities barred from China, which you'd be wise to review.

Fourth, it deters inadvertent law violations. Shipment seizures and hefty penalties can result from claiming a false origin.

Lastly, it helps avoid costly transport delays. By validating origin, you expedite the customs clearance process.

Note, it's essential to correctly identify where your goods have been produced or substantially transformed. Verifying this from the start can save a significant amount of time, effort, and money. Take these steps seriously—they’ll take you far down the successful import line.

Step 2 - Find the HS Code of your product

The Harmonized System, or HS Code, is an international standard used to classify traded products. It is a 6-digit number that identifies the specific product being shipped and is imperative for customs clearance. This code is essential in determining the import duty that will be applied to the product.

In most cases, your product supplier can provide you with its HS Code. They are usually quite familiar with the products they're handling and the associated regulations.

If this isn't possible, we will guide you through a simple process of finding your product's HS Code. Firstly, visit the Harmonized Tariff Schedule using the following link: HS lookup tool. Enter your product's name in the search bar, and the HS Code should be listed under the Heading/Subheading column.

It's essential to remember that the HS code you choose should accurately represent your product. Misclassification can result in delayed shipments and even fines, so it is crucial to be careful during this process.

Here's an infographic showing you how to read an HS code.

Step 3 - Calculate the Customs Value

Understanding the customs value is vital for your imports as it serves to calculate duties and taxes. Think inversely to the value of your goods; it includes not only the product's price but also the cost of international transport and insurance. This cumulative amount – goods price, freight, and insurance – constructs the CIF value, which stands as your 'customs value'. For instance, if you bought goods worth $1000, paid $200 for shipping, and $50 for insurance, your CIF customs value is $1250, not just the base price of your goods. Remember: Knowing the correct customs value can help you budget accurately and avoid unexpected expenses at the Cambodian customs.

Step 4 - Figure out the applicable Import Tariff

An import tariff is a tax imposed by a country when importing goods from overseas. Regarding your shipments from China to Cambodia, Cambodia applies various types of tariffs, including Most Favored Nation (MFN) rates which are lower tariffs imposed on countries that Cambodia has trade agreements with, and standard rates.

Here's how you can identify the import tariff:

1. Locate the Harmonized System (HS) code for your goods. For instance, let's take the HS code 610910 for a Cotton T-shirt.

2. Use this HS code to look up the tariff on the Cambodia import tariff database. For the example above, the MFN tariff in Cambodia is 10%.

3. Calculate your Cost, Insurance, and Freight (CIF) costs which are needed to calculate the total import duties. Let's say the CIF costs for your T-shirt consignment is $10,000.

4. Now, calculate the import duties using the formula: Import Duties = (MFN Tariff/100) CIF. In this example, Import Duties = (10/100) $10,000 = $1,000.

So, with $10,000 in CIF costs and a 10% tariff rate, expect around $1,000 in import duties. Always check the most current tariff rates and calculate accordingly to avoid unexpected costs.

Step 5 - Consider other Import Duties and Taxes

Understanding all the import duties and taxes for goods entering Cambodia from China can be complex but crucial in avoiding unforeseen costs. Apart from the regular tariff rate, you might face additional duties based on factors like the product's origin and type.

For instance, products that are considered harmful or environmentally unfriendly like certain chemicals or plastic products may attract an excise duty, intended to reduce their import and use. Then, there's an anti-dumping tax, meant to protect local industries from foreign goods sold at a price lower than their market value. Imagine importing steel at $200 per ton, but local steel is $250 per ton. An anti-dumping tax could potentially be applied to balance out this discrepancy.

One of the crucial taxes you should be aware of is the Value Added Tax (VAT). This tax is usually a percentage of the product value, shipping cost, insurance, and other import duties. If your product costs $100, and you paid $25 for shipping along with a $10 insurance fee, then a VAT rate of 10% will apply to the total amount of $135, making your VAT $13.5.

Remember, these are just fictitious figures and rates for illustrative purposes. The actual rates can vary based on many factors, and it's always advisable to consult with a freight forwarder or customs consultant to understand these costs in detail.

Step 6 - Calculate the Customs Duties

In calculating customs duties for your goods imported from China to Cambodia, the customs value serves as a key figure. It's the cost of the goods, freight, and insurance summed up. Let's say, for instance, your customs value is $10000. For a situation with a 5% customs duty but no VAT, your customs duties will equate to $500.

In a scenario with both customs duties and VAT, let's assume there's a 10% VAT on top of the same 5% customs duty. In this case, your customs duties remain $500, but you also pay $1000 for VAT.

In the final case, we add a third variable: anti-dumping taxes and excise duty. If an anti-dumping tax of 15% and an excise duty of 20% apply, your customs duties are still $500, VAT is $1000, plus you'll pay an additional $1500 for anti-dumping tax and $2000 for excise duty.

It's important to note that these calculations can be complex and variables can change. To ensure you aren't overpaying, let DocShipper handle your customs clearance needs. We can expertly navigate every step of the process around the globe, securing the best rates on your behalf. Reach out for a free quote, and within 24 hours, find out how much you can save.

Bill of Lading

Shipping your goods from China to Cambodia? It's time to turn the spotlight on the Bill of Lading (B/L), your golden ticket in the world of international cargo transportation. Serving as a receipt, a contract and a document of title, the B/L is a big deal. It’s the baton pass in your shipping relay, marking the transition of ownership from the seller to the buyer. Its modern cousin, the electronic or 'telex' B/L, sends these details flying across the web, speeding things up while slashing those pesky paperwork costs. Embarking on an air voyage? Don't fret, there’s the Air Waybill (AWB) acting as your B/L equivalent for air freight. Get your documents in order, invest in electronic processing, and your China-Cambodia shipping experience will feel like a refreshing sea breeze.

Packing List

Navigating customs between China and Cambodia? You'll want to pay extra attention to your Packing List. As a shipper, it's your critical task to create this document, meticulously recording each item, quantity, and weight. It's like the Bill of Lading's detailed sibling, but don't underestimate its value. Take a tile manufacturer, for example, shipping a mixed pallet of different tile designs. If one design gets held up in customs, an accurate Packing List will allow other products to be cleared, preventing unnecessary delays. As vital for air freight as it is for sea, the Packing List is your silent, paperwork ally, ensuring the swift passage of goods between borders. Shortcuts may appeal, but missing or inaccurate information can lead to costly hold-ups, rumors your business certainly doesn't need. Accuracy is king – embrace it.

Commercial Invoice

For a successful customs clearance when shipping from China to Cambodia, your Commercial Invoice is key. It details your goods – everything from quantity and price, to country of origin and HS codes. This isn't just paperwork – it's the story of your shipment. For example, inaccuracies in prices or mismatched HS codes can lead to delays. Your tip? Align this with your Packing List and Bill of Lading. Attention to detail matters here, ensuring smooth passage for your goods en route from Guangzhou to Phnom Penh. Remember, the more accurate this document, the more confident and equipped you are to navigate customs. Perfect that Commercial Invoice and you're one step closer to a seamless shipping experience.