FREIGHT THAILAND 🇹🇭 – USA 🇺🇸| Rates – Transit Times – Duties & Taxes

How to calculate duties & taxes when importing from Thailand to USA?

Figuring out duties and taxes is like piecing together a puzzle – you need to have all the right pieces at hand. The country of origin, the Harmonized System (HS) Code of your goods, the Customs value, the tariff rate applicable in the USA, and any other specific taxes or fees that may apply – all of these elements play crucial roles. Your first move is akin to flipping the puzzle box lid to reveal the picture; determine the country where your products were manufactured or produced. This will help you align the remaining elements, creating a clear picture of your expected customs duties when importing from Thailand to the USA.

Step 1 - Identify the Country of Origin

Nailing down the country of origin is your crucial first stepping stone; here's why. First off, it precisely sets the duties landscape - your HS code rests on it. Second, it reflects the trade agreements impacting the customs fees for your shipment. Are your goods benefiting from the U.S.–Thailand Free Trade Agreement? It could mean a world of difference!

Third, import restrictions vary wildly from country to country. It's no secret that some items hailing from Thailand face stricter scrutiny; it's best to be prepared. Don't forget about compliance - it's our fourth point. Knowing the origin country keeps you in line with regulations and avoids potential hiccups. Lastly, it can influence shipment timelines - an aspect you can't afford to overlook.

As you dive into this process, remember two golden rules. Firstly, double-check whether your product falls under the General System of Preference (GSP), which could result in duty-free entry. Secondly, mind that products like textiles may face quotas. But above all, the key lies in those five reasons - they are the foundation stones of your import venture. Happy shipping!

Step 2 - Find the HS Code of your product

The Harmonized System Code, commonly referred to as the HS Code, is a standardized numerical method for categorizing products and commodities in international trade. This internationally accepted system allows countries to perform customs operations and measure international trade accurately.

Your product's HS Code is essentially its identity in the context of international shipping and frequently determines the tariffs, inspection regulations, and documentation requirements. Hence, acquiring the correct HS Code becomes an indispensable part of your international shipping process.

More often than not, your supplier is a reliable source for this information. They are usually well-versed with the products they are exporting and the associated regulations, including the product's HS code.

However, if acquiring the HS Code from the supplier isn't a viable option, you can use various tools to find it on your own. One such resource is the Harmonized Tariff Schedule. This online tool allows you to search for your product's HS Code effectively.

Please be aware: Accuracy is paramount when identifying your product's HS code. Using an incorrect code can lead to shipment delays, customs complications, and potential fines, interrupting your supply chain. This could inadvertently increase your costs and cause unforeseen business disruptions.

Here's an infographic showing you how to read an HS Code. It's a good reference material to ensure that you've identified the correct code.

Step 3 - Calculate the Customs Value

You might be wondering, what exactly is a customs value? To put it simply, it's the total monetary worth of your imported goods as evaluated by the U.S. customs authority, but it's not the same as your products' market price. It's typically calculated based on the CIF value - which includes the cost of your goods, the cost of international shipping, and the insurance cost.

Imagine you're shipping a batch of statuettes from Thailand to the USA. If the price for the items is $1000, shipping costs you $200, and insurance is $50, your CIF, or customs value would be $1250. Thus, while your goods alone cost you $1000, the customs authorities will calculate duties based on the $1250 CIF value. By understanding this, you can plan your budget more effectively and avoid unexpected costs at customs.

Step 4 - Figure out the applicable Import Tariff

An 'import tariff' is essentially a tax imposed on goods transported across international borders. In the United States, the tariff system predominantly used is the 'Harmonised System' (HS).

To identify the applicable import tariff, a key step is to look up your specific HS code in the US International Trade Commission's Harmonized Tariff Schedule, accessible online.

The tool is simple to use:
1. Enter the name of your product in the search bar.

2. Look for the Heading/Subheading column in the results.
3. Here, you will find the HS code for your product.

Here's a walkthrough example to further clarify this:

Assume that you're importing leather bags from Thailand,classified under HS code 420221.You navigate to the USITC's HTC search engine.Enter 420221 in the search box,and the tool will display the corresponding tariff-let's assume a general duty of 20%.

Furthermore, for the sake of example, say your goods' cost, insurance, and freight (CIF) value amounts to $10,000. As such, your estimated import duties would be calculated as 20% of $10,000, equating to $2000.

It's always recommended to verify these rates with a Customs broker or professional to avoid any discrepancies in your calculations. Remember, understanding your expenses is a crucial aspect in avoiding any surprises during the import process!

Step 5 - Consider other Import Duties and Taxes

When importing goods into the USA from Thailand, beyond the standard tariff rate, you might face additional import duties and taxes. These could include excise duty, anti-dumping taxes, and most crucially, the Value Added Tax (VAT).

Excise duty applies primarily to specific goods, like tobacco. Anti-dumping taxes are levied when imports are priced less than 'fair market value', protecting American industries from unfair competition. For instance, if you import steel at a price lower than the local market, you could face an anti-dumping duty.

But the essential one to consider is VAT, which is applied to the customs value of the goods plus duties. Though the USA doesn't have a standard VAT rate, assume it to be 10% for illustrative purposes. If your goods have a customs value of $10,000 and duties of $500, you'd pay VAT on $10,500, resulting in $1,050 (10% of $10,500) in VAT.

Remember that these rates and taxes are illustrative and actual rates may vary. Be sure to check latest regulations and consult with a customs professional to understand your exact costs and responsibilities. Knowledge is power in international shipping, and being fully prepared can prevent unexpected charges and delays.

Step 6 - Calculate the Customs Duties

Calculating customs duties is a critical step in the customs clearance process when shipping goods from Thailand to the USA. Begin by identifying your goods' customs value, which includes the product's price, shipping cost, and insurance.

For example, if your product costs $100, your shipping and insurance costs are $20; the customs value will be $120. If the customs duty rate for your product is 5%, your customs duties will be $6 ($120 x 5%).

In scenarios where Value Added Tax (VAT) applies, the percentage is applied to the combined customs value and duties. Let's say VAT is 7%. Add the $6 duties to the $120 customs value to get $126. Then, multiply $126 by 7% to get a $8.82 VAT amount. Final total: $134.82.

When both VAT and anti-dumping taxes are applicable, along with the customs duty, each tax is sequentially calculated and added to the overall cost. If we consider anti-dumping tax to be 4% and an additional Excise Duty of 3%, you begin by applying the 4% to the $134.82 to get $5.39, making the total $140.21. Then applying 3% Excise Duty gives $4.21, totaling $144.42.

Remember, customs duties are subject to change, and additional costs can significantly impact your overall shipping expenses. At DocShipper, our customs clearance services are designed to efficiently guide you through every step, ensuring you pay only what's required. Contact us for a free quote in less than 24 hours and let us make your shipping journey hassle-free.

Bill of Lading

Navigating Customs clearance between Thailand and the USA? One document you can't overlook is the Bill of Lading. It's like a birth certificate for your shipment, marking the transfer of cargo ownership. With the rise of digitalization, an electronic or telex release is gaining popularity. Faster and more efficient, it eliminates the scramble of tracking physical documents. For air shipment, you'll work with an Air Waybill (AWB) instead. Adopting these practices expedites processes, especially crucial for time-sensitive deliveries. A pro tip? Always double-check information on your Bill of Lading or AWB. A tiny discrepancy can lead to costly delays, derailing your Thai-US business operations.

Packing List

Navigating the shipping journey between Thailand and the USA can feel complex, but let's break down one crucial component—the Packing List. As a shipper, it's your responsibility to prepare this document with absolute accuracy. Think of it as a detailed inventory of your shipment, revealing weights, dimensions, and item counts. For instance, if you're exporting automotive parts, your Packing List should itemize each type of part, their quantities, weight, and other necessary details. Why so meticulous? Customs officials, whether at a bustling Thai seaport or a hectic American airport, rely on your Packing List for inspecting and clearing your goods. Its accuracy determines whether your shipment smoothly sails across the Pacific or faces unexpected delays. So, remember, whether you choose the azure sea or the open skies for shipping, your Packing List is a key flag-bearer of information and accuracy.

Commercial Invoice

A commercial invoice is an essential document when shipping goods from Thailand to the USA. It plays a crucial role in determining customs duties and clearing your goods swiftly through the US customs. It should include details such as: the seller and buyer's name, detailed description of goods, total value, country of origin, HS Code (Harmonized System Code), and terms of delivery (based on Incoterms 2020, e.g., DDP or EXW). A well-prepared invoice helps synchronize information with other shipping documents like the Bill of Lading or Airway Bill, preventing discrepancies that could delay your shipment. For instance, if you're shipping 100 handmade leather bags worth $3,000 from Bangkok to New York, ensure this exact information reflects in all your documentation. A constant check and alignment of your papers will save you the stress of custom bottlenecks.