Freight between Vietnam and China | Rates – Transit Times – Duties & Taxes

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

Duties and taxes can feel like a perplexing maze of numbers and regulations when importing from Vietnam to China. But, much like untangling any enigma, what counts is having the right pieces to make sense of it all. To get an accurate estimate of the customs duties you're likely to incur, it's crucial to know the country of origin, the Harmonized System (HS) code, the Customs Value, the Applicable Tariff Rate, and any other taxes and fees that pertain specifically to your products.

To set the ball rolling, your first objective should be pinpointing the country where the goods were originally manufactured or produced. This piece of information becomes the backdrop against which the rest of your duties and taxes calculation falls into place. It serves as a reliable signpost guiding you through the intricate landscape of international commerce.

Step 1 - Identify the Country of Origin

Identifying the country of origin, in this case Vietnam, is your first crucial step and here's why:

1. Trade Agreements : China and Vietnam are both members of the ASEAN-China Free Trade Area (ACFTA) agreement. This allows for significantly reduced duties on certain exported goods.

2. Correct Classification: The right origin identification leads to accurate HS code usage which undoubtedly helps in correctly estimating duties and taxes.

3. Import Restrictions: Vietnam has specific restrictions on products like raw minerals or certain types of wood. Knowing these can save you from unnecessary legal troubles.

4. Duty Savings: Certain goods originating from Vietnam may qualify for preferential duty rates due to ACFTA, bringing down your cost.

5. Legal Compliance: Getting your country of origin wrong can lead to penalties and delays, a headache you surely don't need.

Remember, every penny saved and every delay avoided counts. Keep your shipping documents ready and correct, and sail through the customs like a pro!

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. This code allows customs authorities globally to easily identify products for the purpose of taxation and regulation enforcement. An accurate HS Code is crucial to ensuring that your freight moves through customs efficiently and smoothly.

The easiest way to find the HS Code of the product you're exporting or importing is directly from your supplier. They're typically familiar with the products they're dealing with and understand the relative regulations that accompany them.

However, if this isn't a viable option, there's a simple step-by-step process you can follow to identify the correct HS Code. Begin by utilizing the Harmonized Tariff Schedule, an HS lookup tool. Once on the site, simply type the product's name into the search bar. From the results, look at the Heading/Subheading column. Here, you will find the HS Code.

Make sure to analyze the search results carefully to choose the most accurate HS Code for your product. It's imperative to get it right because any inaccuracy can lead to delays in customs and potential fines. The trade of your goods depends largely on the correct classification and coding.

Here's an infographic showing you how to read an HS code. Understanding this system will make it easier for you to identify your product's category and ensure a smoother customs experience.

Step 3 - Calculate the Customs Value

In the world of international shipping, understanding the difference between product value and customs value is critical, particularly when importing goods from Vietnam to China. Unlike product value, which is simply the price of your goods, the customs value is something different - it is the CIF value. This includes not just your goods' price, but also the cost of international shipping and insurance (if any).

Think of it this way: If you buy a product for $1000 (Product Value), ship it for $200 (Shipping Cost), and insure it for $50 (Insurance), your Customs Value (CIF) is $1250. This is the value on which customs duties and taxes will be calculated upon reaching China. Simple, right? Remember, the more accurately you calculate, the smoother the clearance process!

Step 4 - Figure out the applicable Import Tariff

Import tariffs are essentially taxes paid on imported goods, commonly assessed based on the Harmonized System (HS) code of the product. China adopts a variety of tariffs, including most-favored-nation tariffs, conventional tariffs, and special preferential tariffs.

To find out the applicable tariff rate for your product imported from Vietnam, follow these steps:

1. Determine the HS code of your product. Let's take an example of '8517.12' for mobile phones.
2. Next, visit China's National Integrated Customs Information Center or a similar portal to check tariff-related information. Enter the HS code, and select Vietnam as the country of origin.

As an example, you might find a tariff of 10%. If you have an invoice value of $20,000 (USD) for the mobile phones and a CIF (Cost, Insurance, and Freight) of $2,000 (USD), the calculation for the import duty will be:

(Invoice Value + CIF) tariff rate= ($20,000 + $2,000) 10% = $2200.

Hence, your import duties will amount to $2,200. Understanding this process can help you better estimate your total landed cost and navigate the complexities of international shipping with China.

Step 5 - Consider other Import Duties and Taxes

Beyond the standard tariffs, you might encounter additional import duties and taxes when importing goods from Vietnam to China. These can depend on the country of origin and the nature of the product, varying widely from one shipment to another.

Consider the excise duty, an additional tax placed on certain goods like alcohol or tobacco. If you're in these industries, it's critical to account for this in your costs.

Another significant duty is the anti-dumping tax. Meant to protect domestic industries, China may impose these on goods believed to be sold at less than fair market value. Suppose you're exporting shoes at exceptionally low prices—you could be subject to these taxes.

Lastly, let's delve into the Value-Added Tax (VAT). This is typically a significant portion of the total tax bill. In China, the standard VAT rate is 13%, but it can range from 9% to 16%. For instance, if you're importing ceramic vases valued at $10,000, your VAT could be anywhere from $900 to $1,600 (just examples, actual rates may vary).

Remember, calculating these duties and taxes can be complex. You might find it helpful to use a formula: CIF Value + Duty x VAT rate.

Being aware of these potential costs upfront can save you from unexpected expenses and trade disruptions.

Step 6 - Calculate the Customs Duties

Determining customs duties for your Vietnam-to-China cargo shipment involves a string of specific computations. The formula we'll use is: Customs Duties = Customs Value x Customs Duty Rate. Customs Value is your cargo's FOB (Free On Board) value.

Example 1: If you’re shipping goods worth $10,000 with a Duty Rate of 10% but without VAT, your customs duties will be $1,000.

In some cases, you’ll also need to account for VAT (Value Added Tax). The formula becomes: Total Duties and Taxes = Customs Duties + VAT.

Example 2: For the same $10,000 cargo and assuming VAT rate at 13%, you'll pay $1,000 customs duties (as above) plus $1,300 VAT, making your total duties and taxes $2,300.

For certain goods, there may also be anti-dumping taxes or Excise Duty. In such cases, each additional cost is added: Total Duties and Taxes = Customs Duties + VAT + Anti-Dumping Taxes + Excise Duty.

Example 3: Assuming the same cargo but now with a 5% anti-dumping tax and 10% Excise Duty, in addition to the $2,300 total from Example 2, you'll pay $500 for anti-dumping and $1,000 excise tax, totaling to $3,800 in duties and taxes.

Navigating these charges can be intricate, but the FNM Vietnam team offers comprehensive customs clearance services, ensuring you avoid paying more than necessary. Contact us for your free quote within 24 hours.

Bill of Lading

Navigating freight between Vietnam and China can be tricky, but your ace in the hole is a document known as the Bill of Lading. It signifies ownership change, so getting it right is key. Ever had that aha moment when you sell your used car and hand over the title? It's like that, only for your goods. An electronic version, the telex release, makes it even easier, allowing you to transfer this document over the internet. You also have the AWB for air shipments. Don't overlook these details, they're your ticket to smooth sailing (or flying) of your cargo. Mastering these documents is like grabbing the steering wheel, it gives you control and keeps your shipment on course.

Packing List

Packing List - it's your trusted sidekick when shipping goods from Vietnam to China. It's more than a mere list; it's the magic decoder for your shipment's contents. Picture this: you're shipping machine parts. Your packing list will tell how many boxes, weight, and dimensions. Nothing should remain a mystery. Are you shipping via air or sea? No matter. Your packing list is universal; it's equally important for both. Agencies at the ports of both countries rely heavily on it. Your job is to ensure full transparency and accuracy. Miss a detail and you risk delaying your shipment at customs. So, always double-check your packing list. It's your golden ticket to a smooth shipping journey. Remember accuracy and clarity are your armor against potential customs issues. That's the power of the packing list. Treat it with respect!

Commercial Invoice

A Commercial Invoice is vital to ensure a smooth customs clearance process for your goods from Vietnam to China. It should detail your shipment's value, description, and HS code. Misalignment with your shipping documents can disrupt the process - let's say you've incorrectly recorded the HS code on your Invoice while it matches up on your Bill of Lading, that could spell trouble at the customs checkpoint.

Aligning these documents avoids such hiccups. Pro Tip: Don't underestimate your invoice's formatting. Organizing information clearly helps customs officers perform their job faster, resulting in expedited clearance. Remember, each time you ship, getting your Commercial Invoice spot-on directly impacts your business speed, reducing unforeseen hitches, and catering to shipping goods successfully between Vietnam and China.