Freight Shipping between US and Cambodia | Rates – Transit times – Duties and Taxes

How to calculate duties & taxes when importing from US to Cambodia?

Navigating the maze of customs duties when importing from US to Cambodia doesn't have to be a daunting task. The key lies in knowing your basic variables - the country of origin, the HS Code of your goods, their Customs Value, the Applicable Tariff Rate, and any additional taxes or fees.

Absolutely noteworthy, your journey to estimating duties starts by identifying the country where your goods have been manufactured or produced. This initial step is pivotal because each nation's trade agreement and customs policies with Cambodia can significantly influence the eventual cost of your shipment. Armed with the right information, you can plan more accurately, ensuring no unforeseen expenses catch you off-guard.

Step 1 - Identify the Country of Origin

First, recognizing the country of origin paves the way for all future steps - it's the cornerstone. It's here that you become aware of the specific regulations, duties, and taxes in action.

Second, the US and Cambodia share various trade agreements. These agreements unequivocally determine your duty rates. A concrete understanding of the Cambodian preferential rates that apply to goods from the US can lead to significant cost savings for your business.

Third, it's essential to check for any import restrictions. Certain goods, like weapons or hazardous chemicals, may face limitations or could be outright prohibited.

Fourth, understanding the country of origin plays a vital role in avoiding costly import mistakes. Falling afoul of Cambodian customs law can lead to heavy fines or shipment delays.

Lastly, detailing the country of origin in your paperwork is mandatory. Skipping this might subject you to future audits or prevent customs clearance altogether.

Relish the details in the US-Cambodia relation, as the devil is in the details. Thoroughly read through the bilateral trade agreements and any potential restrictions before proceeding with your shipment. Each element impacts your bottom line! Remember, your customs experience should be smooth sailing, not a storm. Plan wisely and sail accordingly.

Step 2 - Find the HS Code of your product

The Harmonized System (HS) Code is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products for the purposes of assessing duties and taxes.

If you're in need of this code, the most straightforward way to get it is to ask your supplier, as they are likely well acquainted with the products they're exporting and the corresponding regulations.

However, if obtaining this code from your supplier is not feasible, don't worry as it can also be found using a simple step-by-step process. First, navigate to the Harmonized Tariff Schedule. Upon reaching the website, simply type the name of your product into the search bar. The HS code will then appear in the Heading/Subheading column.

It's important, however, to issue a word of caution; selecting the correct HS code is not only necessary, but crucial. Utilizing an incorrect code can result in shipping delays and even potential fines. Therefore, making sure the HS code you've chosen is correct, is of utmost priority.

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

Step 3 - Calculate the Customs Value

Understanding customs value is key to predicting your total import costs when shipping from the US to Cambodia. Don't confuse this with the product's price. The customs value is the CIF value: the price of your goods, plus the cost of international shipping and insurance.

For example, say you're importing auto parts worth $20,000. Your shipping cost is $1,000 and insurance is $500. Your customs value would be $21,500. This is crucial, because Cambodia's customs authorities calculate duties and taxes based on this CIF value, not just the raw product cost.

So, make sure to factor in all these costs to avoid any unpleasant surprises at the customs office.

Step 4 - Figure out the applicable Import Tariff

To ship goods internationally, understanding import tariffs is critical as they are specific taxes imposed on goods imported from another country. Cambodia principally uses an ad valorem tariff system where duties are calculated based on the value of goods.

For U.S. exporters, the U.S. Harmonized System (HS) code of your product will come in handy. This numerical code is recognized worldwide and identifies the type and nature of goods being shipped. Let's say you're shipping footwear with outer soles of rubber (HS code: 640299).

To find the applicable import tariff, access Cambodia's official tariff database. Enter these details to determine the specific duty. For instance, let's assume the database shows a 20% tariff for this product.

Next, the 'Cost, Insurance, and Freight' (CIF) value, which is the cost of the goods, the freight, and the insurance, is required to calculate the import duties. If the CIF value comes to $5000, the import duty would be 20% of $5000, resulting in a duty of $1000.

Please note, rates can change, and additional taxes might apply, so always verify before you ship.

Step 5 - Consider other Import Duties and Taxes

Beyond standard tariff rates, you might encounter extra import duties based on your product's nature and its origin country. For instance, an 'Excise Duty' could apply to goods like alcohol or tobacco.

There is also 'Anti-Dumping Tax'; if a product sells for less in the destination country compared to its market price in the exporter’s country, it’s seen as dumping, which this tax aims to counteract.

Most importantly, let's discuss 'VAT'. In Cambodia, this is typically 10% of the cost, insurance, and freight (CIF) value of the goods plus duty. Take an example: if your product's CIF value is $1000 and your duty charge is $150, the VAT would be $115 (10% of $1000+$150).

Remember, these are just examples; actual rates can fluctuate.

As you organize logistics and negotiate contracts, understanding these potential extra costs can help prevent unpleasant surprises and keep your budget under control.

Step 6 - Calculate the Customs Duties

Calculating customs duties in Cambodia for goods imported from the US is a nuanced process involving several variables: customs value, VAT, anti-dumping taxes, and excise duty. To illustrate, let's look at three scenarios.

In scenario one, suppose you ship goods worth $10,000 with a duty rate of 10%. Your customs duties would be $1,000 ($10,000 x 10%), with no VAT involved.

For scenario two, let's say your consignment, still worth $10,000, attracts a 10% duty rate and a VAT at 10%. Here, you first calculate the customs duty ($1,000), then add it to the item's cost to get a new value($11,000). VAT is then calculated on this amount as $1,100 ($11,000 x 10%). Your total tax due would be $2,100.

Finally, in scenario three, with goods valued at $10,000, a duty rate of 10%, an anti-dumping tax at $500, and an excise duty of 5%, your computation changes slightly. First, calculate customs duty ($1,000). Then compute VAT as in scenario two. Lastly, add the anti-dumping tax and excise duty(5% of $11,000), bringing the total tax to $3,050.

While conscientious tax calculation is crucial to avoid overcharges, navigating international customs can be quite intricate. That’s where DocShipper comes in. From handling customs clearance to ensuring you don't get unfairly charged, we've got you covered. Have us take care of every step for less hassle and more peace of mind. Contact us for a free quote in less than 24 hours. We're here to make your shipping experience seamless.

Bill of Lading

Navigating the cargo shipment between US and Cambodia? The Bill of Lading (BOL) is your vital document, marking the critical transition of ownership from seller to buyer. Much like a receipt, it presents crucial details about your consignment and offers proof of a contract.

Stepping into the digital age, opt for a 'telex' release, an electronic BOL. It speeds up the process, and you can bid farewell to potential losses or delays related to physical paperwork. In the fast-paced world of air cargo, your go-to document is the Airway Bill (AWB), a non-negotiable transport document.

For seamless cargo movements, ensure your BOL or AWB is accurate and in order. Remember, the little investment in meticulous paperwork pays off with swift customs clearance.

Packing List

Navigating international shipping from the US to Cambodia? Then the Packing List should be your best friend. It's a detailed inventory of your shipment that customs officials use to track imports and exports. Think of it like the ultimate transparency tool - it outlines what you’re shipping, how much, and how it’s packed.

Whether you choose sea or air freight, skipping it can lead to delays, penalties, or even shipment seizures. Let’s say you’re shipping automotive parts. Your Packing List should explicitly enumerate each item, like '50 spark plugs in Box 1', and its weight. Accuracy is vital here; a wrong count can cause a mismatch during customs scrutiny, spelling trouble.

So, remember to create this document diligently; it's that last guardrail before your shipment sails smoothly into Cambodia.

Commercial Invoice

A Commercial Invoice plays a critical role in navigating customs clearance between the US and Cambodia. Think of it as your shipment's passport; it must contain accurate details like a full description of goods, HS codes, and the buyer and seller's information.

Always remember, discrepancies between your commercial invoice and other shipping documents can stall the process, inflating costs, and causing unscheduled delays.

For example, imagine you're shipping a consignment of handcrafted wooden chairs. The Commercial Invoice should detail each item's materials, manufacturing process, and origin—not just a generic 'wooden chair.'

This precision prevents undue duties and keeps your shipment on schedule. When creating your Commercial Invoice, consistency is your ally. Align all descriptions and details across your shipping documents to streamline the customs journey from the US to Cambodia.