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

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

Understanding how to calculate customs duties for importing goods from the US to Hungary can significantly minimize your shipment costs. At the heart of this calculation lies information such as the country of origin, HS Code, Customs Value, Applicable Tariff Rate, and any additional taxes and fees relevant to your merchandise.

Essentially, these elements form the foundational basis of any customs duty estimation.

The very first stride in this process is to correctly identify the country where the goods you're shipping have been manufactured or produced. This knowledge is neon-significant because it directly influences how much— or how little— you'll end up paying in import duties.

With the right preparation and understanding of the customs process, your shipment can sail smoothly from the bustling harbors of the US to the heart of Hungary.

Step 1 - Identify the Country of Origin

Recognizing the country of origin is your first priority when determining import duties from the US to Hungary. Here's precisely why:

• Trade Agreements: Hungary and the US have certain trade agreements that may reduce or eliminate duties. The country of origin signifies which agreements apply to your goods.
• Tariffs: Customs tariffs vary based on the item's origin. Knowing where your goods were produced helps assign the correct tariff.
• Import Restrictions: Some items from specific countries face restrictions or prohibitions. Early identification helps avoid unforeseen holdups.
• Compliance: Regulators often require full disclosure of goods' origin, any violations of which may incur fines or penalties.
• Preferential Access: Some countries get favorable treatment in terms of less paperwork or lower duties, marked by their origin.

Trade between the US and Hungary is regulated under the European Union's Generalized Scheme of Preferences (GSP). This scheme provides preferential access to certain goods, which can significantly ease your import process and reduce costs.

Remember, restrictions apply to specific goods, particularly agricultural products and specific chemicals, which require supplementary permits. So, before you ship, check with the Hungarian National Tax and Customs Administration to ensure a smooth journey for your goods. A seamless shipping experience hinges on these small yet essential steps. Preparation, in this case, truly is key.

Step 2 - Find the HS Code of your product

The Harmonized System Code, often simply referred to as the HS Code, is a unique identification code used by customs for goods and commodities that are being shipped internationally. This universal taxonomic framework aids in the classification, tracking, and taxation of items across worldwide ports and borders.

Lake a product's passport, it allows customs to understand what the product is, how much duty should be charged, and if any restrictions apply.

An easier way to find your product's HS Code, especially if you're new to international freight shipping, is to ask your supplier for it. As experts in their industry fields, they're often familiar with the products they're importing/exporting and relative regulations, thus they usually have this information readily available.

If for any reason you're unable to get the HS Code from your supplier, don't fret. We've prepared an easy step-by-step process to help you find it:

1. Visit the Harmonized Tariff Schedule.
2. Type the name of your product into the search bar.
3. Look at the Heading/Subheading column where you should find the HS Code for your product.

A special note of caution: make sure to be accurate when you're choosing the HS Code. An incorrect code might not seem like a big deal, but it can actually lead to delays, misunderstandings, and even potential fines. It's the same as having incorrect information on your passport—the consequences can be significant!

After understanding the importance and finding method of your product's HS code, you might be wondering how to read an HS code. Here's an infographic showing you how to read an HS code.

Step 3 - Calculate the Customs Value

Making sense of Customs Value can be a little befuddling. It's easy to think it just represents the price of your goods, but that’s not quite the case. Customs Value, or CIF Value, encapsulates not just the price of your product but also your international shipping and insurance costs.

Let's say you ship a $5000 product from the US to Hungary. Let's add shipping fees of $200 and an insurance premium of $50. By summing these figures, your CIF Value comes out to be $5250. This is the amount that Hungarian customs will consider during the clearance process.

So, it’s crucial you calculate this accurately to avoid unexpected customs charges.

Remember, arming yourself with knowledge is a surefire way to reduce logistical headaches!

Step 4 - Figure out the applicable Import Tariff

An Import Tariff is a tax imposed by a government on goods imported from another country. This can significantly affect the cost of your consignments. Since Hungary is part of the European Union (EU), it uses the EU’s TARIC System for customs tariffs.

To determine the import tariff for your goods:

1. Head over to the TARIC System - European Customs and type in the HS code of your product that was identified earlier, along with the country of origin (US in this case).
2. The system will provide information about duties and taxes applicable to the product.

Let's say you wish to import wooden furniture (HS code: 940330) from the US to Hungary. After entering the code and country, the tool might show a Most Favored Nation (MFN) duty rate of 2.7%. Adding insurance and freight costs (CIF) of $2000, the customs value would be this CIF cost plus the tariff.

So, your total customs value = CIF ($2000) + CIF Tariff Rate = $2000 + $2000 2.7% = $2054

Remember, understanding import tariffs can drastically influence your shipping decisions, help avoid unwanted penalties and keep costs optimized. It's all about being aware and well-prepared!

Step 5 - Consider other Import Duties and Taxes

Beyond the standard tariff when importing goods from the US to Hungary, you might also face other import duties, with rates that hinge on your product's nature and origin country.

One example is the excise duty, which you'll typically see applied to specific goods like alcohol or tobacco. The rates can be quite complex and vary according to the type or the quantity of the product.

Then, there's the anti-dumping tax. Suppose your goods are sold at a lower price than in the origin country. In that case, an anti-dumping tax might be applied to protect Hungary's local industries. Let's say what you're selling is a pair of American-made sneakers for the equivalent of $30 in the US but decide to price it at $20 in Hungary, an anti-dumping duty might kick in.

Don't overlook the VAT either. This can significantly affect your import costs even though it's not directly a part of the import duties. In Hungary, the standard VAT rate is 27%. So if your good's customs value (the cost of the product + transport cost + insurance + import duties) is $250, you'd need to pay $67.5 as VAT ($2500.27). Remember, these are examples, and real rates may vary.

Understanding these additional costs is essential to avoid any unpleasant surprises on your shipping journey. We recommend consulting with a customs broker or professional service, who will provide accurate and up-to-date information tailored to your situation.

Step 6 - Calculate the Customs Duties

Calculating customs duties on goods imported into Hungary from the US involves several factors: customs value, VAT, anti-dumping taxes, and Excise Duty.

Here's a simplified formula: (Customs value + Shipping costs) x Duty Rate + VAT. Anti-dumping tax or Excise Duty can also affect your total cost.

1. In our first example, imagine you're shipping computer parts worth $5000 with a shipping cost of $1000, and a duty rate of 3%. You'd calculate your duties as: ($5000+$1000)3% = $180.
2. Our second example, with VAT, adds another level. Let's say the VAT in Hungary is 27%: so your total cost becomes ($5000+$1000)3% + ($5000+$1000+$180)27% = $1984.8.
3. In the last case, if there's an anti-dumping tax of 10%, and an Excise Duty of 5%, the cost increases further: (($5000+$1000)3% + ($5000+$1000)10% + ($5000+$1000+$180)27%)5% = $2383.84.

These examples show the complexities of customs duties. Our DocShipper customs clearance services are designed to help you navigate these complexities. We ensure you pay only what's necessary, and nothing more. Get a free quote from us in less than 24 hours and we'll help you clear customs seamlessly and efficiently, anywhere in the world.

Bill of Lading

Understand the indispensable role of the Bill of Lading in your US-Hungary freight journey. It's the official record of your shipped goods, outlining details like quantity, origin, and destination. It's also your proof of ownership transition.

No Bill of Lading, no goods - it's that important.

But here's a nifty efficiency boost: electronic or telex release. It enables the digital transfer of this critical document, eliminating those pesky physical-handoff delays. And if you're branching into air cargo, you'll need to familiarize yourself with the AWB, or Air Waybill. Just like the Bill of Lading, but at 30,000 feet.

Practical tip? Always verify document details meticulously. A minor error can stall your precious cargo at customs, so review every piece of data with laser focus.

Packing List

If you're shipping goods from the US to Hungary, designing an accurate Packing List is your key task. It’s more than an inventory; it’s your passport through customs. Acting as a blueprint of your shipment, it details every product, capturing quantity, weight, and measurements.

Not being accurate could halt your cargo at customs, causing delays, added costs, or even denial of entry. Imagine sending a shipment of machinery spares, forgetting to list a few items, then having your entire shipment detained for inspection.

It's an avoidable hassle! So, whether shipping by sea or air, ensure each item is thoroughly listed on your Packing List. After all, your freight's smooth journey hinges on it!

Commercial Invoice

Navigating customs clearance between the US and Hungary? Your Commercial Invoice needs to step up! This document carries weight, being your declaration to customs officials about what you're shipping. It lists critical details like the description and value of goods, terms of trade (incoterms), and buyer-seller details.

Misalignment with other shipping documents? A big no! Ensure the commercial invoice syncs perfectly with the rest of paperwork, especially your Bill of Lading. Remember John, who got his auto parts shipment stuck due to mismatched details? You wouldn't want to be John!

Double-check your documents, streamline your shipping process, and breeze through Hungarian customs, just like Smart Corp did with their tech equipment last quarter. Stick to these tips, and you'll master the Commercial Invoice game!

Certificate of Origin

When shipping goods from the US to Hungary, obtaining a Certificate of Origin (CoO) is critical. This document verifies your cargo was manufactured in the US. But why does it matter? Here’s a real-world example: a toy manufacturer in New York is sending their products to a retailer in Budapest.

By presenting the CoO at Hungarian customs, the manufacturer can access preferential duty rates, often reducing costs. It’s your golden ticket to smoother, more affordable international trade. So, don't overlook the CoO; it’s more than just a formality, it's your passport to savvy freight forwarding.

Certificate of Conformity (CE standard)

When shipping from the US to Hungary, a country within Europe, the Certificate of Conformity (CE standard) is crucial. This certificate signifies that your goods meet safety, health, and environmental protection standards applicable across Europe. It's not about quality assurance, but about regulatory compliance - a mandatory box to tick for import.

It's like the UL certification in the US, but with wider implications. Without this certification, your goods would be held at Hungarian customs, resulting in delays and possible fines. To avoid this, make sure your products comply with the necessary EU regulations before shipping.

Consult with an accredited EU-based agency to get your products certified, if not already done so. This way, the customs clearance process becomes a smooth sail.