Freight Shipping between Vietnam and Bangladesh | Rates – Transit times – Duties and Taxes

How to calculate duties & taxes when importing from Vietnam to Bangladesh?

In the world of international shipping, correctly estimating duties and taxes can often feel like battling a complex puzzle. But armed with the right information, the task becomes far more manageable. Here's the rundown, you'll want to have the country of origin (where your goods were actually produced), the Harmonized System Code (HS Code), the customs value of your items, and the applicable tariff rate. Beyond that, remember that there may be some additional taxes and fees depending on your specific product and shipping scenario.

In the case of importing from Vietnam to Bangladesh, your journey begins by pinpointing precisely where your goods were manufactured or produced. This is your critical first step, and the country of origin determination will influence many of your subsequent calculations and decisions. So let's delve into each aspect to ensure you can confidently navigate this area of your shipping journey.

Step 1 - Identify the Country of Origin

First, let's drive home why recognizing your goods' Country of Origin matters so much. Primarily, it influences the Harmonized System (HS) code classification - a must for getting a duty estimate. Secondly, it plays a part in free trade agreements. Did you know Vietnam and Bangladesh have mutual connections via the Asia-Pacific Trade Agreement (APTA)? This means you could see a welcome shrink in that duty charge! Thirdly, specific goods may require special permits for import based on origin, saving you from an unpleasant surprise at the custom office later. Moreover, Country of Origin stamps on goods affect consumer perception and are legally required in many countries. Lastly, anti-dumping laws may apply if goods are imported below standard market value, which depends heavily on the Country of Origin.

Take note! Bangladesh imposes import restrictions on certain kinds of goods from specific countries. So, your next action should be to crosscheck against the Bangladesh import regulation list. Feeling overwhelmed? Engage a savvy customs broker to navigate these paths. Benefits of professional advice include accurate HS classifications, smooth customs clearance, and peace of mind. Now you're set for success - onto step two!

Step 2 - Find the HS Code of your product

The Harmonized System Code, also known as HS Code, is a globally recognized system for naming, describing, and classifying different types of goods that are being shipped internationally. It plays an integral role in custom duties, ensuring that products are correctly declared at customs and are subject to appropriate tariffs.

In most cases, acquiring the HS Code for your product is a straightforward process: Ask your supplier. As they're involved in importing, they're likely versed in the necessary regulations and the correct HS Code for the goods they're dealing with.

But if obtaining your HS Code from the supplier becomes an issue, fear not! You can find your HS Code with this easy, step-by-step process:

1. Visit the Harmonized Tariff Schedule. Here, you can use the HS lookup tool which makes the task considerably faster and easier.
2. Once you're on the page, you just need to key in the name of your product in the search bar located at the top.
3. After inputting your product name, look for your HS Code in the Heading/Subheading column.

However, please be aware! Accuracy is key when choosing the HS Code for your products. An incorrect HS Code can lead to shipping delays and you may even face potential fines due to errors in your declared customs documents. Precision in getting your HS Code right, therefore, cannot be overstated.

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

Step 3 - Calculate the Customs Value

Understanding the 'Customs Value' can be a little tricky. Essentially, this is the total cost that your goods would be assessed on at the Bangladeshi customs. Surprisingly, it doesn't only encapsulate the product's worth but also includes the shipping and insurance costs.

Consider this, you're shipping a product that costs $100 and the international freight and insurance costs are $20 and $10, respectively. In this case, your CIF value would thus stand at $130, which is the figure you'd present to the customs officials.

Thus, your customs value = price of goods ($100) + international shipping ($20) + insurance ($10) = $130.

This is the amount that will be used to calculate any applicable customs duties. Remember, no surprises when it comes to customs procedures equals a smooth shipping experience.

Step 4 - Figure out the applicable Import Tariff

An Import Tariff is a tax placed on goods brought in from other countries, acting as a regulatory measure to control foreign trade. In Bangladesh, an ad valorem tariff system is used, where duties are calculated as a percentage of the product's value.

To determine import tariffs for goods being imported from Vietnam, you need to:

1. Search for the tariff rates applicable to your product, identified by the Harmonized System (HS) code, from Bangladesh Customs Tariff. Keep in mind, these rates can change periodically, so ensure you have the most updated tariff schedule.

2. For example, if you're importing ballpoint pens from Vietnam (HS Code: 9608.10.00), you might find an ad valorem rate of 25%.

3. If your Cost, Insurance, and Freight (CIF) value of the pens is $10,000, your import duties would be 25% of $10,000, which is $2,500.

Remember, this is a simplified example. In the real world, the calculation might involve other variables, such as preferential tariffs, additional taxes, or freight and insurance charges. Understanding the complete process will help you budget your import operation more accurately and avoid potential surprises.

Step 5 - Consider other Import Duties and Taxes

After determining the standard tariff rate for your goods imported from Vietnam to Bangladesh, it's essential to understand that there could be additional charges. Various factors may influence these, such as the product's nature and its country of origin.

For instance, some goods can attract excise duty. Usually applied to items like alcohol, tobacco, or luxury goods, the rate varies depending on your product. There might also be anti-dumping duties to consider, which exist to protect local industries from unfair foreign pricing practices.

Notably, there's also the Value Added Tax (VAT) that plays a significant role in your total cost. In Bangladesh, the standard VAT rate stands at 15%. Do note that our figures are merely illustrative—the actual rates may differ.

So, if you're importing an item worth $1000, with a standard duty of 20%, excise of 5% and VAT at 15%, you would calculate as follows:

1. Duty: $1000 20% = $200
2. Excise: ($1000 + $200) 5% = $60
3. VAT: ($1000 + $200 + $60) 15% = $189

Adding all these up, your total payable cost would be $1449. Understanding these extra costs will help you plan your budget better and avoid unexpected expenses during the import process.

Step 6 - Calculate the Customs Duties

In this step, calculating customs duties will be a breeze. Firstly, you'll need to determine the customs value of your goods, in USD. The Taxable value equals the Customs Value plus the Freight/Insurance.

For instance, if your goods cost $5,000 with freight and insurance of $1,000, the taxable value stands at $6,000. If Customs Duty is 10%, you'll owe $600 in regards to goods without VAT.

Incorporating VAT to the equation adds a layer. If VAT is 15%, it's applied to the taxable value plus the customs duty. Using our example, the value becomes $6,600 (Buffet Value + Customs Duty), resulting in a VAT of $990.

When anti-dumping taxes or Excise Duty come into play, they are also added to the equation. For instance, if A.D. taxes are 9% and Excise Duty is 4%, these are calculated individually on the taxable value ($600 A.D. tax and $240 Excise Duty) before being bumped up with VAT.

Sounds complex? Don't worry. With FNM Vietnam, we handle all the number crunching and customs processes, ensuring you're never overcharged. Reach out for a free quote in under 24 hours. Experience hassle-free customs clearance with us, wherever your business takes you.

Bill of Lading

Shipping goods from Vietnam to Bangladesh? You'll need to familiarize yourself with a critical document: the Bill of Lading. The heart and soul of ocean freight, it's the official record of your cargo and signifies a shift in ownership from the sender to the receiver. Picture it as your cargo's passport! Digging deeper, the electronic, or 'telex' release, makes the document transfer process a breeze. No more mailing or couriering the original paper documents – a huge sigh of relief, especially if time is of the essence. For air freighters, the Air Waybill (AWB) plays this role. Incorporating these nifty tools into your shipping practices can streamline your transportation logistics and take some of the stress off your shoulders. Remember: the more prepared you are with your paperwork, the smoother your path to customs clearance!

Packing List

Whether you're exporting apparel from Bangladesh or shipping home goods from Vietnam, a Packing List is your essential navigator. It's a meticulous inventory of each item you're shipping - a blueprint that translates your cargo into an understandable language for customs officers. Found in your shipping container, it details the quantity, description, and weight of your goods. For example, it should note 20 cartons of cotton t-shirts, 10 kgs each. In both sea and air freight, having this inaccuracy-free ensures smooth customs clearance, saving you unwelcome hold-ups. Remember, in the world of shipping between Vietnam and Bangladesh, your Packing List is as crucial as the captain of a ship!

Commercial Invoice

In your journey of shipping goods from Vietnam to Bangladesh, getting the Commercial Invoice right is vital. It's more than just a list of the goods you're transporting; it's your declaration to Customs regarding the value of your transaction. Your Commercial Invoice should align with your Bill of Lading and other shipping documents; discrepancies can delay customs clearance. Ensure your invoice is crystal clear - include descriptions of items, their rates, country of origin, and VAT number if applicable. For instance, if you're exporting Vietnamese coffee beans, mention 'Roasted Arabica coffee beans from the Central Highlands of Vietnam' instead of just 'coffee.' This precision helps to avoid misunderstandings and penalties. Remember, an accurate and detailed Commercial Invoice eases your customs clearance process, saving your business both time and money.

Certificate of Origin

When shipping goods from Vietnam to Bangladesh, your shipment isn't complete without a Certificate of Origin. This document verifies the country where your goods were produced - say, those handcrafted porcelain vases from Hanoi - and it's crucial for determining customs duties at the Bangladeshi border. In some cases, you might land a preferential duty rate by proving Vietnamese origin. This could save your business a pretty penny, turning potential customs headaches into smooth sailing. Keep in mind, this is not a one-size-fits-all rule. It's all about the type of goods you're shipping and the specific trade agreements between Vietnam and Bangladesh. Don't undersell this crucial piece of paper, because it just might become your ticket to smarter, more cost-effective shipping.

Certificate of Conformity (CE standard)

When shipping from Vietnam to Bangladesh, your shipment might require a Certificate of Conformity that adheres to the CE standard. This stamp of approval determines if your items are up to European health, safety, and environmental standards. It’s a prevailing requirement of the European market but isn't the same as quality assurance which focuses on preventing defects throughout the production process. Plus, it's not directly comparable to any US standards. So, are you sending toys, machinery, or electronics? Make sure you obtain the CE mark certificate to avoid delays in customs. Remember that the absence of necessary documents could lead to your shipment being seized. Your reliable partner on this journey is accurate documentation, ensuring smoother customs clearance.