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

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

When figuring out your costs for importing goods from China to Germany, a key part involves securing a solid estimate for duties and taxes. The process begins by understanding several elements including: the country of origin of your goods, the Harmonized System (HS) Code, the customs value, the relevant tariff rate, plus any other additional taxes or fees that could be applicable to your products. The initial step in this process is to pin down the country in which the goods were produced or manufactured, as this critically impacts the amount of duties and taxes due.

Step 1 - Identify the Country of Origin

Knowing the Country of Origin, in this case, China, is crucial even before you can start considering the Harmonized System (HS) code or customs duties. Here's why:

1. It confirms your trade route: Essential to know for bookings, planning, and logistics.
2. It impacts customs duties: The European Union, including Germany, has varied tariff agreements with China. Customs duties depend on these agreements.
3. It influences import rules: Specific products have restrictions based on their country of origin.
4. It determines paperwork: Each country has its set of required administrative documents.
5. It sets the stage for negotiations: Understanding where the product comes from can influence your talks with suppliers or clients.

Don't forget to explore the full benefits of the EU-China Investment Agreement. It might lead to lower customs duties, but always keep an eye out for the import restrictions that Germany imposes on certain goods from China.

For a smooth, cost-effective business transition, understanding your Country of Origin is the first step to success. So, dig into the details and discover how it influences your import.

Step 2 - Find the HS Code of your product

The Harmonized System Code, often referred to as HS Code, is a universally accepted coding system that classifies traded products. It is effectively used by more than 200 countries worldwide and it helps in identifying the nature of goods being transported. This code is essential as it not only forms the basis of customs duties and taxes but also aids in collecting global trade statistics.

If you're unsure about your product's HS Code, a good starting point can be asking your supplier. Your supplier is well-versed with the products they're dealing and familiar with the applicable regulatory provisions. Thus, they can provide reliable insights into the suitable HS Code for your product.

If such an option is unavailable, worry not. We have a straightforward method to guide you through finding your HS Code.

Step 1: Visit the Harmonized Tariff Schedule database.
Step 2: In the database, make use of the search bar to input your product name.
Step 3: Once the results are displayed, look for your product under the 'Heading/Subheading' column - your HS code would be there.

A word of caution - accuracy in determining the HS Code is critical. Inaccurate selection of an HS Code can potentially cause hold-ups in your shipment and, in worst cases, invite penalties. Hence, please ensure the correct and precise HS Code has been chosen for your product.

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

Step 3 - Calculate the Customs Value

In the world of shipping, the customs value and product value aren't always the same. Think of it this way, you're a toy manufacturer in China and you're shipping a container of toys, value $10,000, to Germany. But the customs value isn't just about the cost of those toys. It's a wider picture, a CIF value, which stands for the Cost of the goods, Insurance and Freight.

To paint a more vivid picture, let’s consider a shipment with goods costing $10,000, and the international shipping costs you another $1,000. Then add an insurance cost of $100. The customs value here is the addition of these three: $10,000 (goods) + $1,000 (shipping) + $100 (insurance) = $11,100. Thus, the customs value is always $1,100 more than the value of the goods alone. A seemingly small difference, but it's this figure that customs duties are calculated upon when importing into Germany.

Step 4 - Figure out the applicable Import Tariff

An import tariff is a tax imposed by a country on goods imported from abroad. In the case of Germany, which is part of the European Union, these tariffs are harmonized across all member states.

To determine the specific import tariff for your product, use the TARIC System - European Customs. Here, you can enter the Harmonized System (HS) code of your product and China as the country of origin. This will reveal the exact duties and taxes applicable to your product.

Let's say, for instance, you're importing wooden furniture from China. If the HS code for your product is 9403.60 (other wooden furniture), a simple search in TARIC will show the import tariff. For instance, it might show 2.7%.

Additionally, consider insurance and freight (CIF) costs. Assuming your CIF cost is $10,000, you can calculate the import duties using the provided tariff rate. The formula is: CIF cost Import tariff rate = Import Duties. In our example, that would be $10,000 2.7% = $270.

By calculating the import duties correctly, you can avoid any unexpected costs and ensure smooth and efficient transportation of your goods.

Step 5 - Consider other Import Duties and Taxes

But it doesn't end there. Meet VAT (Value Added Tax), possibly the most critical aspect to note. This is a consumption tax charged at each stage of the supply chain, and is usually a fraction of the sum total of the good's cost, insurance, and freight (CIF), and duty. For example, in Germany (where standard VAT is 19%), let's say you import toys with a CIF value of $1000, and a duty of $150. Your VAT would be 19% of $1150, or, $218.50.

Remember, it's just a simplified example, the rates can considerably vary. Be prepared, and factor these costs into your budget for a successful import operation. Importing can be like a puzzle, but once all the pieces are in place, it's a rewarding accomplishment.

Step 6 - Calculate the Customs Duties

In Step 6, you'll learn to compute customs duties on shipments from China to Germany. Begin by determining your shipment's customs value - the cost of your goods plus transport until the German border. On this value, you'll ascertain customs duties and possibly VAT.

Let's decipher this with three examples:

1. Customs Duties only Calculation: For a $1000 shipment, assuming a 10% duty rate, your payable customs duty would be $100 (10% of $1000), with no VAT incurred.

2. Customs Duties & VAT Calculation: In addition to the 10% duty ($100), you might also deal with 19% VAT on the sum of the goods' value and customs duties. So your VAT will be $209.1 (19% of $1100), totaling $309.1 due.

3. All Taxes: If your goods attract an anti-dumping tax or Excise Duty too, let's say 5%, it gets added on. With all inclusions ($100 duty + $209.1 VAT + $55 Excise Duty), you owe $364.1 in total.

This process might seem intricate, but don't fret! At DocShipper, we handle every bit of your customs clearance globally. We ensure maximum value, save you from undue charges, and deliver a free quote within 24 hours. Navigate this journey with us!

Bill of Lading

Navigating the shipping waters from China to Germany? Don't forget your Bill of Lading - your golden ticket in the world of cargo. It's both your receipt and proof of ownership, mandatory whether you're transporting stuffed animals or cutting-edge tech. Taking care of this 'BOL' marks the departure of your goods from China and their official acceptance in Germany. Prefer to go paperless? Opt for a 'telex' release, an electronic variant speeding up the transition process. Remember, if you're flying goods across borders, you'll need an Air Waybill (AWB) instead, serving the same function in air cargo. Stay patient and organized - mastering these documents can turn tense cargo moments into smooth sailing (or flying!).

Packing List

Ask any shipping professional and they'll tell you - never underestimate the power of a Packing List. Yes, your business might be making perfectly packaged pallets of automotive parts, hoping to set them sailing from Shanghai to Stuttgart, but without a comprehensive Packing List, your shipment can be left high and dry. It's your job as a shipper to meticulously detail every item, including weight, measurements, and descriptions. The importance of accuracy can't be overemphasized. Whether it's air or sea freight, European customs officials, and also their Chinese counterparts, scrutinize this document to determine the value of your shipment. Picture your goods halted because a 'fidget spinner' was recorded as a 'gadget spinner' - a simple typo could mean complications at the border. Accuracy saves time, money, and keeps your goods moving smoothly from China to Germany!

Commercial Invoice

Your Commercial Invoice is a key player in getting your shipments from China to Germany without drama at the customs gate. It's pivotal to accurately detail the goods - type, quantity, price, and country of origin are just a few of the essentials. Think of it like a passport for your products; discrepancies draw red flags and delays. Keep your invoice aligned with all other shipping paperwork to avoid any mismatch confusion. For instance, if you're shipping industrial machinery, a misaligned description between the Packing List and Commercial Invoice could stall your shipment. So, double-check those details and keep things moving smoothly. Your cargo is counting on you.

Certificate of Origin

In the world of international shipping, the Certificate of Origin (CoO) can be a true game-changer. This nifty document, listing the country where your goods were manufactured, is key when shipping between China and Germany. For instance, you're exporting manufactured electronics from Beijing to Berlin. Your CoO proves your goods' origin, crucial for customs to calculate tariffs or potentially provide preferential duty rates. So, imagine on one shipment you save 5% on duties; with regular shipping, this could radically decrease your expenses over time. Who knew such a piece of paper could seriously boost your bottom line? Don’t overlook the importance of the CoO – it's a major player in the shipping game!

Certificate of Conformity (CE standard)

As you ship your goods from China to Germany, providing a Certificate of Conformity (CE standard) is crucial. This document is well-regarded across Europe, bearing proof that your products comply with stringent EU safety, health, and environmental protection standards. For example, if you're exporting electronics, toys, or machinery, they should bear the CE mark to ensure seamless customs at the German border. This isn't necessarily an endorsement of quality assurance but a permit showing your goods meet the necessary legislative requirements. Unlike the quality standards such as ISO, the CE standard is somewhat akin to the FCC standard utilized in the U.S. To simplify the process, it's recommended to engage a professional agency to help secure the CE standard certification for your products - a prudent investment that eases your shipping journey.