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

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

Understanding how to estimate duties and taxes for imports from Vietnam to Nigeria could save you unexpected costs and streamline your shipping process. The key components in this calculation include the Country of Origin, HS Code, Customs Value, Applicable Tariff Rate, and any other potential taxes and fees tied to your specific goods.

The valuable first step in this process is to pinpoint the country where your goods were manufactured or produced, not necessarily where they were bought. Why? Because shipment regulations and tariffs often hinge on this origin point, setting the foundation for the rest of the calculations. Let's dive deeper into this step-by-step guide, and you'll be a master in estimating import duties and taxes in no time.

Step 1 - Identify the Country of Origin

First off, recognizing the country of origin - in this case, Vietnam - is vital for five key reasons. Specific trade agreements, customs duties, import restrictions, product categories, and country-related considerations - all get tied back to this first step!

So, why pay attention to identifying Vietnam as your country of origin correctly? Your customs duties hinge on this! Both Vietnam and Nigeria have mutual trade agreements, which can flex your duty rates. A precise identity can help you leverage these benefits.

What about import restrictions? Certain Vietnamese goods may have explicit rules when importing into Nigeria. Knowledge here can save you from unnecessary hold-ups!

Accurate country identification becomes crucial for product categorization as well. You'll need it to obtain your Harmonized System (HS) Code, an international product naming convention. It helps streamline your shipping process.

Lastly, information about production or assembly might influence your import duties. For some products, they consider not only where you produce them but also where their components come from.

In essence, unease and complexities in global trade can significantly reduce with careful attention to country of origin. Or as we say it - Know your where, to save your fair!

Step 2 - Find the HS Code of your product

The Harmonized System (HS) Code is an internationally standardized system of names and numbers that classify traded products. These codes are used by customs authorities globally to identify products and apply customs duties. Having the correct HS code for your product is crucial not only for establishing the amount of duty payable but also for ensuring smooth customs clearance.

If you're uncertain about the HS code for your product, your first point of call should be your supplier. Most suppliers will be familiar with the products they're exporting, including the corresponding HS codes and regulatory specifics.

However, if asking your supplier isn't an option, don't worry! We're here to steer you through the process of how to identify your HS code. This can be done using an HS lookup tool, such as the Harmonized Tariff Schedule, follow these steps:

1. Open the Harmonized Tariff Schedule website.
2. Type your product name into the search bar.
3. Look for your product in the Heading/Subheading column—your HS code should be listed there.

An important note: Ensure your HS code is accurate. An incorrect code may not only result in delayed shipments but could also lead to potential fines. These figures aren't just arbitrary numbers; they hold significant meaning within trade logistics, which your business operations depend on.

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

Step 3 - Calculate the Customs Value

Delving into the customs process, ever wondered what customs value means and how it’s not precisely the same as your product's price? It's more like an all-inclusive concert ticket that covers the band and the venue. In shipping terms, the customs value is the CIF value: the price tag of your goods (Cost), the journey those goods took from Vietnam to Nigeria (Insurance), and the performance given by your freight forwarder (Freight). The customs officers use this value, in USD, to calculate the amount of duties you'll owe. So, for example, if your goods are valued at $5000, the freight cost is $2000, and your insurance charges are $500, Your CIF’d be $7500. Easy, right? Now you're one step closer to understanding the ins and outs of importing in Nigeria!

Step 4 - Figure out the applicable Import Tariff

An import tariff is a tax imposed by a country's customs authority on imported goods. The objective is to protect domestic industries and maintain economic balance. In Nigeria, the tariff system constitutes five categories, namely: Basic raw materials (0%); Capital goods (0-35%); Intermediate goods (0-20%); Final consumer goods (20-35%); and Specific rates (for certain items).

To identify the tariff applicable to your goods, use the Nigerian Customs Service's tariff lookup tool. Here's how:

1. Enter the Harmonized System (HS) code. Let's use 61091000 - Cotton T-shirts, for example.
2. Then choose Vietnam as the country of origin.

Once entered, the tool will provide a tariff rate. Suppose the tool provides a tariff rate of 25%. If your Cost, Insurance, and Freight (CIF) value are $10,000, your import duty can be calculated as follows:

Import duty = CIF value Tariff rate = $10,000 25% = $2,500

Knowing the correct tariff rate ensures you anticipate potential costs and plan your finances effectively.

Step 5 - Consider other Import Duties and Taxes

Beyond the standard tariff rate, your cargo might be subject to additional costs when importing goods from Vietnam to Nigeria. These could depend on a host of factors including the nature of the product and its country of origin.

For instance, let's consider the Excise Duty which is levied on certain goods like tobacco and alcohol. The anti-dumping duty is another potential cost, aiming to protect the local markets from foreign goods sold cheaper than their fair value. For example, if a Vietnamese manufacturer sells bicycles at $50 in Nigeria, while its fair value is $70, the Nigerian government can impose anti-dumping duties on these imports to level the playing field. However, these are just imaginary values and real rates might differ.

Perhaps the most significant is the Value-Added Tax (VAT). In Nigeria, the VAT rate is currently about 7.5%. So, for a $1000 consignment, you would be required to pay an extra $75 as VAT.

In summary, understanding all potential costs will help ensure your budgeting is accurate and avoid any unpleasant surprises at the customs. However, since tax and duty rates can change, keeping up-to-date with the latest regulations is essential.

Step 6 - Calculate the Customs Duties

In determining the total amount due for customs duties in Nigeria when importing from Vietnam, it primarily depends on the customs value of the goods. For Example A: If you're shipping furniture valued at $20,000 with just a customs duty of 20%, your final customs fee would be $4,000.

Adding Value Added Tax (VAT) into the equation makes a noticeable difference. To illustrate, consider Example B: You're sending textiles worth $30,000 with a 15% customs duty and a 7.5% VAT. Here, first, the customs duty would be $4,500. Then calculate 7.5% of the total amount ($30,000+$4,500), resulting in a VAT of $2,587.50. The combined duty and VAT would total $7,087.50.

Lastly, for Example C, you're shipping electronics valued at $40,000 with a 20% customs duty, a 7.5% VAT, a 10% anti-dumping tax, and a 5% excise duty. The process would be to calculate each tax based on the accumulated total. Thus, you'd first pay $8,000 customs duty, then $3,600 for VAT, $5,160 for anti-dumping tax, and finally $2,838 in the excise duty. This brings your final fee to $19,598.

At FNM Vietnam, we decipher these calculations for you, ensuring accuracy, legality, and that you're never overcharged. Get a free quote from us within 24 hours for any customs clearance needs worldwide. With FNM, customs don't have to be a challenge.

Bill of Lading

Navigating the paperwork in international freight can be tricky, especially when shipping between Vietnam and Nigeria. Think of the Bill of Lading as your cargo's GPS, tracking ownership changes and making sure your goods end up where they're supposed to be. It's an essential bit of documentation that you can't afford to overlook. Expand your view a bit to consider the Electronic release, or telex release. Faster and more efficient, it cuts through the tape and speeds up document processing. And when it comes to air cargo? That’s where the AWB (Air Waybill) comes into play, adding another layer of security to your shipping process. Don’t shy away from these paperwork steps – they're your safety net in this complex journey. After all, crossing international borders is an art and these documents are your paintbrush.

Packing List

Picturing yourself as a Vietnamese exporter eyeing Nigeria's emerging markets, the Packing List is your compass guiding the shipping process. An accurate, detailed Packing List can be the difference between a swift customs clearance or a delayed shipment. Sea or air, it’s a non-negotiable document, containing essential details like the item description, HS codes, weight, and packing measurements. Just imagine, without a detailed Packing List, your consignment of bamboo crafts could be misinterpreted as restricted items, resulting in a hold-up at Lagos port. To avoid such hitches, be meticulous when creating this document — it’s your pathway to gaining trust with Nigerian custom officers, paving your way towards successful shipping from Vietnam to Nigeria.

Commercial Invoice

When shipping goods from Vietnam to Nigeria, your Commercial Invoice is a critical asset. This essential document should include details like the description, quantity, and value of your goods, the shipper's and receiver's address, and relevant transaction terms. Proper alignment with data on your Bill of Lading or Air Waybill is vital to bypass setbacks in the customs clearance process. Remember, a minor error can result in costly delays! For instance, imagine a shipment of Vietnamese bamboo products held up because the invoice misstated the quantity. Don't let such avoidable mistakes slow you down - ensure every detail matches across your shipping documents, keep your descriptions clear, and triple-check your values. That's how you guarantee swift, hassle-free transport of your goods between these two vibrant economies. With a well-prepared Commercial Invoice, you're one step closer to successfully navigating the logistics of international trade.