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

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

Determining the customs duties is an intricate process, largely dependent on various components including the country of origin, Harmonized System (HS Code), customs value, the applicable tariff rate, and any additional taxes or fees specific to the product type. The country of origin is crucial for it signifies where your goods were manufactured, which is the first step in determining the exact customs fees. Grasping the correct information is key to forecasting your potential landing costs, so ensuring the accuracy of the country of origin is paramount.

Step 1 - Identify the Country of Origin

Determining the Country of Origin (COO) is the first stepping stone for effective importing. So why does the COO matter that much? Here's why:

1. Trade Agreements – Specific accords, like the EU-Vietnam Free Trade Agreement (EVFTA), influence customs duties based on the COO.
2. Import Restrictions – Some goods from Vietnam face restrictions in Portugal, so being clear on COO helps to sidestep any hiccups.
3. HS Code Accuracy – COO affects the Harmonized System (HS) Code, which directly impacts the calculations of duties and taxes.
4. Compliance – Accurate COO maintains importer compliance with customs, avoiding penalties or shipment delays.
5. Market Access – Certain products from Vietnam enjoy preferential access to the Portuguese market due to their origin.

The key is to understand the impact of these specifics on your import. Depending on the agreement in place, you might get duty reductions, preferential access, or even complete duty elimination. Certain Vietnamese goods may face import restrictions, so make sure you understand the limits to avoid any unwelcome surprises. Always play safe and stay compliant. Knowledge is power, and the right understanding of your items' origin can unlock the door to seamless and cost-effective imports.

Step 2 - Find the HS Code of your product

The Harmonized System (HS) Code is an internationally standardized system of names and numbers that classifies traded products. It's used by customs authorities around the world to identify products for the purposes of taxation, regulations, and to keep track of international trade statistics.

A straightforward method to identify the HS Code of your product is by asking your supplier. Suppliers are typically well-versed with the products they're importing and the associated rules and regulations.

However, if that's not an option for you, don't worry. We have a simple step-by-step process laid out for you to find it. Let's get started:

1. Use this Harmonized Tariff Schedule as your HS lookup tool.
2. In the search bar, type in the name of your product.
3. Look for your product's HS Code in the Heading/Subheading column.

This process should gracefully guide you to find the correct HS Code for your product.

One important thing to note is the necessity for accuracy in choosing the correct HS Code. Failing to use the right code can lead to significant delays in your shipment's delivery and may even result in potential fines. Ensuring you have the correct code not only guarantees a smoother shipping process, but it also keeps you within the legal confines of international trade.

To help visual learners, here's an infographic showing you how to read an HS code.

Step 3 - Calculate the Customs Value

Shipping from Vietnam to Portugal? You might be scratching your head about how to calculate the customs value. No worries, it isn't the same as product value. Your customs value is the CIF Value – the cost of your goods, insurance, and freight all combined.

Let's assume you’re importing handmade furniture priced at $5000. Your international shipping cost is $800, and your insurance cost $200. Your CIF Value becomes $5000 (goods) + $800 (shipping) + $200 (insurance), equals $6000. This sum, $6000, is your customs value in USD. This forms the basis for import duty & tax calculations in Portugal.

Remember, nailing your customs value calculation means avoiding any unsavory surprises. Pencil it in your calculations, and ace your international shipping game!

Step 4 - Figure out the applicable Import Tariff

Import tariffs, also known as customs duties, are the taxes you pay when importing goods from another country. In Portugal, which forms part of the European Union, this is dictated by the Common Customs Tariff (CCT).

To ascertain the applicable tariff for your goods imported from Vietnam, use the TARIC System - European Customs, an online platform that offers detailed information on all aspects of EU customs duties. Start by inputting your previously established Harmonized System (HS) code and Vietnam as the country of origin. This will provide the applied duties and taxes for your product.

As an example, let's consider the HS code 6109.10, which corresponds to T-shirts, singlets and other vests, knitted or crocheted, of cotton. When selecting Vietnam as the country of origin, the TARIC system might indicate a duty rate of 12% ad valorem. If your CIF (Cost, Insurance, and Freight) costs were, let's say, $10000, the import duty would equate to an additional $1200.

Remember, customs duties can significantly impact the final price of your goods, so it's vital to calculate them accurately to avoid any unexpected expenses. By doing so, you'll not only ensure compliance with customs regulations but also optimize your shipping and logistics costs.

Step 5 - Consider other Import Duties and Taxes

In addition to the standard tariff rate, other import duties may also apply. These are contingent upon both the country of origin, in this case, Vietnam and the type of product being shipped.

For instance, an excise duty is typically placed on goods of a specific nature, such as tobacco or alcohol. Anti-dumping taxes, on the other hand, might be applicable if goods are sold significantly below their usual market price. As a way to control competitive pricing, countries will impose these taxes to prevent a 'dumping' of low-cost goods into their market.

Most crucially, there's the VAT rate. As an importer, you're required to shoulder this value-added tax which applies to all operations in the supply chain that contribute to increasing the value of a product at each stage. The current standard VAT rate in Portugal is 23%. To calculate VAT, use this formula: (Cost of goods + excise duties + tariff duties) x VAT%. For instance, for an import costing $5,000, the resulting VAT would be $5,000 x 23/100 = $1,150.

Remember, these are hypothetical figures only and actual rates may differ. It's essential for importers to stay on top of these costs to prevent any unforeseen expenditure upon arrival of goods in Portugal.

Step 6 - Calculate the Customs Duties

The basic formula to calculate customs duties consists of multiply the customs value of your goods (CIF: Cost, Insurance, Freight) by the country's duty rates.

Here's how it plays out in real-world scenarios:

1. Consider you import goods valued at $10,000 with a duty rate of 5 percent, but no VAT applied. Your customs duty will be $500.

2. When VAT applies, it includes the customs value and duties. For goods valued at $10,000 with a 5 percent duty rate and 23 percent VAT, you'd pay $500 in duty and an additional $2,415 in VAT.

3. The full equation includes an anti-dumping tax and Excise Duty. Let's have goods worth $10,000, with a 5 percent duty rate, 23 percent VAT, 10 percent anti-dumping taxes, and 5 percent Excise Duty. Your total would be $500 for duties, $2,415 for VAT, $1,000 for the anti-dumping tax and $500 for Excise Duty.

This might seem overwhelming, but that's where FNM Vietnam enters the stage. We can simplify the process, ensuring you're accurately charged every step of the way. Reach out to us for a free quote in less than 24 hours. We’ve got your worldwide customs clearance covered.

Bill of Lading

Taking your goods from Vietnam to Portugal? You'll need a Bill of Lading, the VIP pass in the world of logistics. Think of this crucial document as the transfer deed in a property sale - it passes cargo ownership from seller to buyer. Whether you're dealing with a mountain of cotton swabs or a fleet of mopeds, the Bill of Lading holds your transaction details: commodity, quantity, destination, and more.

Now, let's talk convenience with the electronic or 'telex' release. Say goodbye to courier costs and delayed shipments. This nifty digital tool allows you to receive your Bill of Lading electronically, speeding up the process. For air cargo? It's the Air Waybill (AWB) to the rescue.

What does this mean for you? Well, sorting these details early can be a game-changer, avoiding potential snags at Portuguese customs and keeping your cargo sailing smoothly.

Packing List

When dispatching goods from Vietnam to Portugal, the Packing List is a crucial lifeline. It's your responsibility as a shipper to ensure the accuracy of each item's details, including weight, dimensions and count on this list. Consider it as a passport for your freight! It works with both sea and air freights. A detailed Packing List can prevent costly customs delays, like an unfortunate business who had a container of machinery parts held up in Lisbon due to a vague description. So, it’s instrumental in ensuring your goods sail smoothly through customs, saving you from potential headaches and holdups.

Commercial Invoice

Everyone wants a smooth customs clearance process from Vietnam to Portugal, and your Commercial Invoice plays a pivotal role. It's not just a bill but a vital document outlining your shipment's value, origin, and description. Pay attention to the details! Make sure the information aligns with other shipping documents to avoid delays. Think about the Harmonized System (HS) Codes - using these correctly on the invoice helps Portuguese customs understand exactly what's in the shipment and quickly determine the required duties. Keep in mind, an error-free Commercial Invoice can be that decisive factor that allows your shipment to reach Lisbon, Porto, or Faro on-time, boosting your business credibility. So, invest time in getting it right!

Certificate of Origin

Shipping your goods from Vietnam to Portugal? Don't overlook the Certificate of Origin! This document is your product’s passport, indicating its birthplace - the country of manufacture. It's more than just a formality, it might just be your ticket to lower customs duty rates. Imagine your shipment of handmade Vietnamese furniture: A correctly submitted Certificate of Origin could land you preferential rates, saving your business considerable cost. But remember, any inaccurate details can cause problems in customs and delay your shipment. Accuracy matters, so double-check your forms for error-free, smoother shipping. Happy trading!

Certificate of Conformity (CE standard)

Moving goods between Vietnam and Portugal? Then the CE standard is crucial. This is your ticket to the European market, showing that your products meet the high health, safety, and environmental standards set by the EU. It's not about quality assurance – it's about conformity to specific regulations. Think of it like the US standards for goods. But remember: you need to secure this before shipping, just as critical as your cargo is packed. Take note: it's not interchangeable with the UK's new UKCA marking. Check the product categories that need the CE standard, get it certified, and fast-track your entry into Portugal's market. Knowledge today, leads to smoother customs tomorrow.