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This is a complete guide for importing tax from China to the US in 2022.
In today’s guide, you’ll learn:
What should you pay for customs duties?
How much should you pay?
How to pay?
How to avoid Customs duties?
Lots of more.
In short: if you want to grow your business in 2022, you’ll love this new guide.
Chapter 1: Import tax from China to US Basics
What is customs duty?
Before proceeding with the import tax from China, I have a question. How often do you import products? If you haven’t imported, you might not know how it all works.
So, what is a customs duty in the true sense?
Customs duty is the import tax from China to USA you have to pay for importing the items. It doesn’t apply only to China. Instead, if you live in US or UK, you can import inventory to foreign countries. Then you must pay the import tax. That tax is Customs duty.
Is it essential to pay the customs duty?
Some people frequently ask whether they should pay their customs duty or not. Remember, one thing is important here. Taxes apply to everything if you use household products or anything else. When it comes to importing, we call those taxes customs duty.
So, is it essential?
The simple answer is yes. You need to pay the customs duty, otherwise, your products are illegal. More simply, the customs officials verify your products are safe to use and import.
Now, the question is. What if I don’t pay my import tax from China to USA?
Note down that it is illegal. Your products will not be verified and might be taken hold of by the authorities. Keep in mind this fact before taking any steps regarding the import tax from China to USA.
Types of products to pay for the China customs tariff
A good question.
However, you need to understand the types of China customs tariffs before understanding them.
There are three types of taxes to pay:
- VAT( value-added tax)
- Consumptions tax
- Customs duty
The amount might vary because of the number of products and relevant criteria.
Now, the main question is here. What types of products are liable to taxes, right? No worries, I have listed some of the products here.
- Tablet PC: 0%
- Solar Panels: 0%
- Electric Bikes: 0%
- Furniture Products: 1%
- LED Bulb Lights: 3.9%
- Wrist Watches: 9.8% + US$1.53 per unit
- Clothing: 16.5%
- Peanuts: 131.8%
Nowadays, you can observe prices are a bit high. It all is due to trading tension between China and the US.
Chapter 2: What does custom import tax from China include?
Customs duty on imports from China to the US includes several different aspects. For example, merchandise professing fees or harbor maintenance fees. In the end, you need to calculate the total tax to pay your import duty from China to USA.
Import tax from China in the US
Customs duties apply to all trades above $200. For example, you import a machine for $4000. There will be an import duty on machines from China. If your order is below $200, as is prevalent with household inventory, you can avoid the customs charges from China.
As above, the China customs duty rates are the same for the given products in 2022. Before paying, you must know how it works to be safe.
Merchandise processing fee
Since you need to import from China to the USA, a merchandise processing fee applies to all the items. But, there is a criterion to determine the price.
So, how much do you pay for the merchandise processing fee? It is not much. You can see as below:
- If the value of your goods is less than $2500, you might have to pay $2 to $9 per shipment.
- If the value of the goods is more than $2500, the rates might vary. For example, you need to pay 0.3464 percent of your goods.
By that means, if your products have a value of $5000. Then the 0.3464% will be around $17. Not precisely the price, but I have mentioned roundabout China customs tariff for import from China to USA.
However, there are upper and lower limits for the merchandise processing fees.
The minimum fraction of the merchandise processing fee is $26, while the maximum is $485.
So, you can determine the China customs tariff on your products.
Harbor Maintenance Fee
The harbor maintenance fee is not that much. Do you know, why? It is just maintenance for the sea freights in the US. It will not apply if you don’t import by sea freight.
However, what is the harbor maintenance fee, then?
No surprises. It is just 0.12 percent of the goods. It is such a low price that doesn’t have much effect. In the 1980s, US authorities started to maintain ocean freight.
Additional Taxes – import tax from China
Currently, there is no VAT on imports from China, but it might exist in the future. There is another tax named Federal Excise tax. It is only applicable to tobacco or alcoholic products.
Federal Excise tax is also rarely applicable duty on Goods from China.
Import tax from China to USA relies on the fee on board value of imported goods. It includes:
- Product Cost
- Transportation cost
- Export clearance from China
Most Chinese suppliers quote the price on free onboard rules.
Chapter 3: How much should I pay for customs duties?
Import duty from China to USA depends on several factors. The type of products, number of products, and prices also contribute to the overall price of the import duty from China to USA.
Do you want to know how much import duty you need to pay from China to USA? If yes, no problem at all. I can help you figure this challenge quite comfortably.
To check the import tax from China to the USA for every item, consider the HS code as a top choice. Every product has a different import duty from China to USA. HS code helps determine it effectively.
However, here is the China import tax calculator.
Step 1: Check HS code
HS code shows the country and product information. China customs tariffs apply differently to each item. When it comes to HS code, you need to understand what exactly it is.
HS code refers to Harmonized system code. World Customs Organization has introduced the HS codes to enable easy tracking of prices.
What does an HS code indicate?
You can infer various information from an HS code. Here are some info regarding it.
- Product Category
- Country of Import
- Product Name
Of all this, it becomes easy to use it as a China import tax calculator.
How to check the HS code?
Now, the main question is to determine the HS code. How will you find it? Are there any criteria to deduce it?
Simply talking, it is not difficult to find the HS code. You have an internet supply. Check it on the official website of HTS and put your query in the search box. You will get all the info regarding the product.
However, I can tell you the structure of the code. Here it is:
- Six digit identification code
- 5000 commodity groups
- 99 chapters
- Each chapter comprises 21 sections
Got the code for your product? Just incredible. Now, you can move ahead to ascertain the China import tax calculator.
Step 2: Checking up online prices
Internet facilitates you in every aspect. No matter you want to determine the online rates or HS code, it is always there. However, you can check up on the China custom duty online.
Here are two ways to use the China import tax calculator online.
- Check the China custom duty rates on the HTS official website
- Go through the other official websites to discern the China custom duty on your inventory.
If you have got all the information, it is good to move ahead to the third step and the last one.
Step 3: Calculate the rates – import tax from China
Once you have done all the above steps, the last one is to calculate China custom duty. You can do it by calculating the overall china customs tariff.
You can check the China custom duty for each of your items. For the final calculation, you can multiply and subtract. However, in the end, it will be valuable for China’s import tax calculator.
Here is another scenario. What if your taxes become high? Is it still worth it to import products from China? It depends on your choice. You can reduce or avoid it by following ideas.
- Increase the price of the products to be in profit
- Absorb all China customs tariffs to avoid burden on customers
- Import products from other countries where there is less import duty
Chapter 4: How to pay customs duties from China to the US?
Do you want to pay the customs duties? When you import expensive inventory such as cars, China’s car import tax becomes obligatory. But, the main question is — How can I pay the China car import tax?
There are various ways to do it. I have listed some of them.
Pay to the Freight forwarders
It is a simple yet reliable option. But, you need to manage it yourself to some extent. When importing products from China, your products will arrive at the destination port. Customs officials at the port will thoroughly inspect the items to approve. Once it is approved, you need to pay the taxes for it.
The price depends on the HS code and relevant taxes. A shipping company such as FedEx might send you a payment invoice to pay for clearance. If you have an account on FedEx or any other shipping company, there is another way to pay it.
The company will pay it for you when you pay the. But, it is not free at all. You have to pay $40 to $80 as a fee to the shipping company. So, it is your choice whether to choose this option or not.
You can’t directly pay the local customs official. In a better way, you should ask for customs credit.
What a customs credit is? Is it valuable?
Customs credit can facilitate you. You can import the items to your warehouse and pay the customs charges later on. There is no pressure unless you pay the customs duty on the given date.
In this case, customs officials have accounts in banks. You can send them the required amount. Isn’t it different from the first method to pay?
Purchase DDP from your suppliers
DDP refers to delivery duty paid. It is not a simple term. In actuality, it includes all the taxes including the customs taxes. Before the import, suppliers price every item including the customs duty. That’s why the overall price might be higher than the original price of the product.
Sometimes, VAT and GST are not part of DDP because of different rules in each country. So, you need to pay these taxes whenever your product arrives at the port of destination. You can choose any method of the above three.
Quick Tip: Always be in touch with customs officials to know the exact rates if you are an importer.
Chapter 5: 3 Ways to Exempt from the Customs Duties
Customs duties are just for the safety of imports. Every country has its rules regarding imports and export. Whether you live in Europe or China, you need to pay import tax. So, is there any way to avoid these customs duties?
Yes. There are multiple ways to be exempt from the China car import tax. Here are those three ways.
Personal Exemptions – import tax from China to US
US customs and border protection authority has offered personal exemptions on the limited products. For example, if your imports are worth $800 or less, you don’t have to pay any penny. Remember, it applies to only a limited number of products.
You can’t bring tobacco or alcoholic products in excessive amounts. That’s why restrictions apply to the overall inventory.
Tip: If you have a small number of items, it is a good way to exempt them from the customs charges.
Samples – import tax from China
Samples are not commercial products. In simple words, you can’t sell them. So, customs apply to them? No. There are no customs charges on the samples. But, there are criteria for it. Your products must have a label indicating a sample. So, if you want to get relaxation from customs charges, ask your suppliers to provide samples.
Dropshipping – import tax from China
Dropshipping is another popular method today. Nowadays, most retailers are drop shippers. Do you know, why? Because of numerous advantages.
So, what exactly dropshipping is?
It is a method in which retailers directly connect the sales channels with the manufacturer’s channels. In simple words, it is supply chain management. The retailers might receive orders and inform the manufacturers to fulfill the order. Either by postal services or third-party shipments, the order is fulfilled.
Retailers don’t have to hire warehouse services. It keeps them away from unnecessary expenses.
So, customs duties apply to it?
No. You don’t have to pay the customs duties. Only income tax or sales tax applies.
Chapter 6: 5 Ways to decrease the customs duties amount
Customs duties are not that much nowadays. China import tariff rates in 2021 are just like 2022. Even the China import tax rate in 2020 is almost the same. 25% elevation occurred due to trading tension. Even after a 25% increase, the fee still makes no difference.
However, if you think $26 is high, you have ways to reduce it as well. Have a look at them here.
Correct tariff classification
Correct tariff classification plays a vital role in the reduction of overall import tax from China to USA.
HS code for each item determines how much China customs tariff you need to pay. Simply put, the HS code determines the China customs duty rates. That is why expertise in exploring the technical aspects of products is essential. For example, the wrong HS code can put in losses by fines and multiple times import fees from China.
So, how can you correctly classify the products with relevant HS codes?
Not a big problem at all. You must have either work manually in finding the HS code. Remember, correct categorization is crucial. Otherwise, you might put yourself at big losses. Even in some cases, your customs fines and import duty from China to USA might be more than expected. So, make a technical team that has expertise in General Rules of Interpretation.
One more thing is significant to discuss here. It refers to China import tariff rates 2022. It may be the case that HS code rates are not updated yet. To get current China import tariff rates for 2022, your team must inform. In this way, you can understand the current import duty from China to USA and take to better results.
In actuality, it is not the reduction of import duty from China to USA. Instead, it refers to the prevention of additional taxes and amounts.
Always be on time. It is key to saving money and avoiding headaches. So, how can it be valuable in case of custom duty on import from China?
Let me give you a simple example here. If a cargo takes 24 hours to reach from China to USA. But in 24 hours, the total time division is essential. For example, it takes 16 hours to import from China. Roughly, 2 hours at the border for verification and relevant aspects, and 6 hours to the destination.
To make timely delivery, you must take two major steps.
- Determine the timing of the border. When it closes and opens.
- Ship your inventory according to the timing of the borders.
If your timing is wrong, your products will arrive at the border when it will be off. So, what will happen?
Extra charges will cost you more than expected. For example, warehouse charges, freight costs, and relevant risks are critical. Moreover, time wastage is another loss. So, you caused what?
Two types of losses.
Some have said, ” Time is Money.” Thus, perfect timing can save you money and time.
Decrease product value on the invoice
I won’t recommend you to choose this way. But, it is valuable to discuss. How do customs officials calculate the import fees from China? Maybe they apply the China import duty calculator on every item, right? So, how exactly can you reduce the import fees from China?
An easy method is here. Reduce the product price. For example, import duty on machines from China is quite high if your machine is expensive. What if it is not expensive? Obviously, you will get lower China duty rates. Isn’t it helpful? You can request your suppliers to reduce the price to decrease the China customs duty rates.
But, there is another important scenario here. If you do fake price reductions, it can be a serious matter. If the customs officials find out the truth, they might charge you heavy fines. So, before taking any step, keep it in mind.
Quick Tip: Don’t fake the prices to prevent or reduce the China duty rates.
Use International mail and divide delivery of items
Customs charges from China only apply to a specific amount. For example, when your goods price is above $2500. You have to pay the customs duty. In case of below $2500, you are good to go without custom duty on import from China.
So, how will you reduce the customs charges on your items? Just simple logic. Use the International mail delivery system. Ask your suppliers to send you the inventory through the international mail systems.
Remember, you need to divide the delivery into different components. For example, if your products are worth $3000, you need to divide them into two or three parts. In two parts, it will be a $1500 packet and a $1000 packet through separate mail.
So, will it really work for you?
I suppose it will work. Do you know, why? Because the total price of the delivery is less than the threshold of $2500. Never think that the customs duty on imports from China won’t apply. It is because of shipping inventory from the suppliers not you are there to import yourself.
There is another big disadvantage here. You might have to pay thrice for the separate shipping of your inventory. Moreover, shipping is a bit expensive as well. Adjust the prices accordingly before thinking of reducing duty on goods from China.
Use intermediate trade
Intermediate trades have been a successful option but not a recommended one after all. Nowadays, due to trading tensions, the US government has imposed 25 percent more customs charges on goods from China.
If you add 25 percent to your China import duty calculator, it is a significant amount. So, how can you reduce it?
A simple solution is there. Use the intermediate trade. For example, your supplier is in China. Ask them to send you to an intermediate country such as Korea. From Korea, you can import products to your country. That’s how exactly your products will be labeled from Korean suppliers. You will save an additional 25 percent China import duty rates.
A precaution is here. There are a lot of risks associated with this case. For example, your inventory might damage. You might lose it without proper management. So, it counts on you to prefer what.
Chapter 7: Frequently Asked Questions About Import Tax from China
Is import duty on China products refunded?
The answer is No. It is not like the VAT taxes. You can’t get back import duty on China products. It is a non-refundable fee. Most people have questions in mind about import duty from China.
Remember, its import duty on China products is not a high amount in most cases. For example, your products cost more than $7500. Then the import duty on China products will be around $27. Do you think it is very much? I suppose not.
Can import duty on China products be higher?
That is not the import duty. There are some additional taxes like shipment fees, taxes, and everything else that might add.
Do I need to pay import duties and taxes on replaced or repaired units?
A good question for all quick learners. You have to pay custom duty on import from China on all products. No matter these are replaced or repaired. But, the question arises: Is it the second time you send your item back to your suppliers because it is damaged?
If yes, don’t worry about custom duty on import from China. You don’t have to pay again for your item. Instead, you need to be in touch with your freight forwarder. Make sure your freight forwarder or customs broker knows all the scenarios.
What if you paid for the second time? Can you get a refund of your money?
Yes. You can claim a refund for import tax from China to USA for the second time.
Do we need to pay import duties or other taxes in China?
There is no China import tariff. We don’t call it the China import tariff that you need to pay for your items. These are entirely essential to pay for the products when you buy.
If you need to pay, it is part of free onboard prices. So, don’t worry at all about this aspect.
What are the safety steps on import from China?
To import the products from China, you must be in contact with the suppliers. However, there are some safety steps you must follow.
- Your products must have a label. And what a label is? Made in China label is quite essential to attach to your inventory. You know, why? Whether you are importing items from China or US, relevant country customs officials demand it. It is a necessary step. If you haven’t fastened it, the customs officer will ask you to do that. So, it is better not to waste any time regarding the labels.
- Do you have heavier products? Get ready to pack it in wooden boxes with fumigation certificates. It is a requirement for the import from China by Customs official. If you don’t do that, you might not get approval for your items.
- For nonwooden packaging, you need to specifically mention it. In your documents, you must refer to the nonwooden packaging of your inventory.
- If your products are related to food or beverages, you must make sure they are safe. For this purpose, get the certificate from the FDA. Sometimes, you need to pay the fee for procuring the certificate. So, better be ready for it.
- Usually, the container weight is 38,000 pounds. It is heavier. If the weight exceeds it, you must have a proper mechanism to handle all the items in it. Otherwise, you won’t get approval from customs officials.
These are very crucial steps. Before importing, you must be ready for it. Once everything is ready to import, you are good to go for customs clearances.
What will happen if I don’t pay China car import tax on time?
You know, there are a lot of suppliers and manufacturers in China. It is not all about car importing. Instead, you might ship all categories of items.
So, what happens if you don’t pay China car import tax on time?
Custom fines will apply to your inventory. Within 15 days, you need to submit the fee and all the documents to complete your verification and shipment of items. If you don’t do that, delivery will be moved to the supervision warehouse for unloading and inspection.
Here are different types of duties to pay.
- Demurrage fee
- The cabinet fee and returning cabinet fee
- Warehouse decommissioning fee
- Warehouse loading fee
- Warehouse storage fee
- Container costs
Customs officials allow you six months for the fine submission. If you don’t submit, they will take away your items. An auction of your products might hold to compensate for all the penalties. That’s what exactly happens when you don’t pay or are late.
What is the free storage period on the docks?
The answer relies on the contract. You need to check how many days you have for free storage. It depends on the team to store the inventory for the given period.
However, 4 to 5 days conclude the free storage period. After that, you need to pay the charges. If you want to avoid the fee, pick your cargo from the docks.