Why the majority of your shipments don’t need duty tax
What percentage of your orders go to Australia or Europe?
What is the average value of your order?
What type of product do you sell?
With an average value of $125 USD, an online order can expect no duty tax or tariff charged regardless of the harmonized code.
Why does the value of the order affect the duty tax rate? Well, depending on where your order is going, it may undergo minimal clearance procedures. Countries have different thresholds for a product’s value where no duty is accessed and if the product is under the De Minimis value.
“De Minimis” is the threshold for a product’s value below which no duty tax or tariff is charged.
Just shipping into Europe, the De Minimis duty is €150. In the United Kingdom, it’s £135. Going to Australia it’s $1,000 AUD. Even though most of these shipments will still be accessed Value Added Tax (VAT) you can save yourself a lot of time and money when you understand the impact De Minimus value has or does not have on your international customers.
Going to Canada?
If your item is North American Free Trade Agreement (NAFTA) eligible or based on your products HS code, it may not be accessed duty tax. However, for most online retailers, duty to Canada is a reality for their orders since Canada has a $20 CAD De Minimus. Even if Canada is a large percentage of your orders, there is a good chance that 50% or more of your orders are still going to destinations with De Minimis values in your favor.
If you find yourself in the shoes of an average online retailer, remember, the majority of your shipments are not dutiable.