Freight Shipping between Thailand and Saudi Arabia | Rates – Transit times – Duties and Taxes

How to calculate duties & taxes when importing from Thailand to Saudi Arabia?

Understanding the estimation of duties and taxes is critical when embarking on the journey of importing goods from Thailand to Saudi Arabia. This integral step involves a few crucial components such as the origin country of the goods, the Harmonized System (HS) Code of the items, the customs value, along with the applicable tariff rate, and any other additional charges, taxes, and fees associated with the imported products. Identifying the country where your items have been manufactured or produced constitutes the initial stepping-stone in this process. Let's break this down further aided by some real-world examples to make this concept easily digestible for you.

Step 1 - Identify the Country of Origin

Determining the country of origin comes first for five key reasons:

1. Trade Agreements: Thailand and Saudi Arabia have mutual trade agreements impacting customs duties. Knowing your goods' origin supports these, often lowering costs.
2. Tariff Rates: Variations exist based on origin. Verifying origin helps ascertain accurate tariff rates.
3. Export Restrictions: Likewise, import restrictions exist. Some goods need certain certifications or are entirely banned, based on origin.
4. Documentation: The source country dictates essential paperwork. Ensure legal, hassle-free shipment.
5. Customs Expectations: Clear up customs quickly and successfully, mitigating unexpected hold-ups.

Thailand enjoys preferential trade agreements with Saudi Arabia. Specific Thai products receive lower or even zero tariffs due to these agreements. So, your goods' origin significantly impacts the duties paid. As a business, knowing such agreements equips you with financial foresight.

Import restrictions also abound, varying by product category and origin. Your goods might require special permissions, or face total import bans. So, research these carefully to avoid mishaps.

Make this first step count. Get acquainted with your product's origin, the existing agreements, and possible restrictions. This sets the foundation for a smooth overseas shipment.

Step 2 - Find the HS Code of your product

The Harmonized System (HS) Code is a standardized numerical method of classifying traded products. It allows customs authorities to precisely identify what's being imported or exported, thus determining the taxes, duties, and regulations that apply.

Usually, the most straightforward course of action is to obtain the HS code from your supplier, as they're likely already familiar with the products they're exporting and the relevant customs regulations.

However, if that's not an option, we're here to help you find the HS Code yourself through an easy 3-step process:

1. Go to the Harmonized Tariff Schedule
2. Enter the product name in the search bar.
3. Look at the 'Heading/Subheading' column, which contains the HS code.

Please take note that accuracy is incredibly important when choosing the HS Code. An incorrect code can lead to delays in shipping or even potential fines. It's vital to make sure you have the right one.

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

Step 3 - Calculate the Customs Value

Cracking the customs code starts with understanding Customs Value. If you thought it's just the actual cost of your goods from Thailand, you're not alone. However, it's a bit more nuanced. Customs Value is actually your CIF value - the trifecta of Cost of goods, Insurance, and Freight. The Cost is what you paid for your items. Insurance is what you shell out to protect your goods en route. Freight - that's the cost you bear for transporting your goods from Thailand to Saudi Arabia. Let's say you bought goods worth $1000, paid $200 for shipping, and a $50 insurance premium. Your Customs Value isn’t the $1000 you initially thought. It's actually $1250. Understanding this critical detail can save you from any unexpected customs obligations down the line. So give careful attention to your CIF when calculating your Customs Value.

Step 4 - Figure out the applicable Import Tariff

Import tariffs, simply put, are taxes on imported goods. The purpose is to protect domestic businesses and jobs from foreign competition. Saudi Arabia uses the Harmonized System(HS), which is a globally recognized classification system for trades.

To identify the import tariff, you'll need the HS code for the product you're exporting. As an example, let's take a hypothetical shipment of washing machines from Thailand to Saudi Arabia, with the HS code 845011. You would input this into a tariff lookup tool available via Saudi's official Saudi Customs Website. Follow these steps:

1. Enter the HS code that was identified earlier and the country of origin (Thailand).
2. Check the duties and taxes applied to your product.

To better illustrate this, suppose that the CIF cost (the cost of the goods plus insurance and freight) is $10,000 and the tool specifies a tariff rate of 5%. The calculation of the import duty would be: $10,000 × 5% = $500.

Remember, having the correct information including accurate HS codes will help you avoid unexpected costs and delays.

Step 5 - Consider other Import Duties and Taxes

In addition to standard tariff rates, other import duties may come into play when importing goods from Thailand to Saudi Arabia, highly influenced by the origin country and product type. For instance, excise duty is applied on specific products like carbonated drinks at 50%.

Surprises can also come in form of anti-dumping taxes, levied on goods sold substantially below their normal value. Consider if you import a Thai air conditioner worth $200 - an anti-dumping tax might increase your costs unexpectedly.

On top of these, VAT is critical. In Saudi Arabia, it's currently 15% on the customs value. So for a $1,000 machine, besides any customs duty and so forth, there's an extra $150 VAT. Remember, these are merely illustrations, rates can vary.

Understanding these nuances helps avoid unexpected costs, keeping your budget in check. It’s always beneficial to consult a customs broker, or professional service like ours, to get accurate, updated information.

Step 6 - Calculate the Customs Duties

At this stage, it's crucial to nail down the exact costs of your shipment from Thailand to Saudi Arabia. The customs duty calculation revolves around three key elements: the customs value, VAT, and potential anti-dumping taxes and Excise Duty.

The formula is straightforward: Customs Duty = customs value customs tariff. In a scenario with only customs duties and no VAT, imagine a customs value of $10,000 with a 5% customs tariff. Your duty would thus be $500.

If VAT gets involved, it adds an extra layer. VAT is applied not just to the customs value but also to the duty itself. So in our previous example, if Saudi Arabia's 15% VAT is imposed, you would owe $1,575: the original $500 plus 15% of $10,500 ($1,075).

In some cases, extra taxes such as anti-dumping taxes and Excise Duty can apply. For a product that incurs a 10% anti-dumping tax and 5% Excise Duty on a $10,000 customs value, your overall cost would be the custom duty ($500) + VAT on ($10,500) + Anti-Dumping ($1,000) + Excise Duty ($500) = $3,075.

The customs clearance process can be tough to navigate alone, but there's no need to fret. DocShipper's skilled team can take care of every step in any corner of the globe. Contact us for a free quote within 24 hours. With us at your side, you can avoid paying more than necessary.

Bill of Lading

Navigating the waters of international shipping between Thailand and Saudi Arabia? You'll require a Bill of Lading for sea transport. This critical document stands as a symbol of ownership transfer and determines who takes custody of your goods at arrival. There's also an option to consider: telex or electronic release. It's ideal for shippers craving speed, as it enables fast access to documents - a necessity in our digital era. For the lot that opts for air cargo, there's the AWB or Air Waybill, a like-for-like document for air shipping. Just remember, always double-check your Bill of Lading or AWB details as even tiny errors can complicate the customs clearance process. Be accurate, be smart, and watch your goods flow smoothly from Thailand to Saudi Arabia.

Packing List

In shipping goods from Thailand to Saudi Arabia, your Packing List acts as the hero document that makes clearing customs a breeze. Think of this list as the blueprint of your shipment, detailing every item in your freight, their quantities, and descriptions. Whether you're using sea or air routes, Saudi customs officials will scrutinize this list to verify the contents of your shipment.

For instance, let's say your business specializes in Thai Silk. A well-detailed packing list breaks down the quantity of silk in each box, field, or unit in your shipment. Skimping on this important detail could lead to customs bottlenecks, unnecessary charges, or worse, seizure of your shipments.

Remember, details matter, and accuracy is paramount. So, if you don't want your Thai Silk stuck in a customs warehouse, invest time in perfecting your Packing List. This simple, yet essential step could save you time, cost, and the hassle of untangling a web of customs issues.

Commercial Invoice

When you're shipping goods from Thailand to Saudi Arabia, your Commercial Invoice is a key player. It needs to have specific details like item description, quantity, value, and HS codes. This document serves as a declaration to Saudi customs about what you're sending and its worth. Misalignment between your Invoice and other shipping documents can trigger delays and extra charges, so it's vital to stay consistent. A tip to overcome this challenge is to double-check your declarations match across all documents. For instance, if you're exporting 500 pairs of leather shoes priced at $50 each, this exact information should reflect in every shipping document. Avoid general terms like footwear. Instead, be precise: Leather shoes, size 40. Remember, the Commercial Invoice is your first line of communication with Saudi customs; make it count.