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What are customs duties and import taxes?
What are customs duties and import taxes?

What do I do about customs duties?

Updated over a week ago

Customs duties and import taxes vary from country to country, and kick in at different values for different types of products.

Here are the basics of what you need to know about customs duties, including who pays them, whether your eCommerce platform has prepaid them, and more.

Who pays the customs duties, the shipper or the recipient?

If the package you've shipped contains products that qualify for your destination country's import taxes, your recipients will be responsible for paying these to their country's customs or tax department to receive the package.

How does paying customs duties work?

The process of how your recipient pays customs duties varies depending on where they live. Here's how we've seen it work most times:

  • Notification from Customs Departments: Typically, your recipient's package is held by their country's customs department, and notification is given to them either by mail or phone. This notification will inform them how much they need to pay and how.

  • If Your Recipient Pays Customs Duties: Once your recipient pays whatever customs fees are due, the package is delivered.

  • If Your Recipient Doesn't Pay Customs Duties: If the recipient doesn't pay the taxes due, the package should be returned to you, but it may depend on the country's policies 😅

Customs fees might get charged to you after you ship your package

Customs duties on international shipments can be charged to the sender in certain situations, even though the responsibility typically lies with the recipient in a foreign country.

  • Customs Fees Appear as Carrier Adjustments: If customs duties get charged back to you for a shipment, you'll see it reflected as a Carrier Adjustment on your Reports page.

  • Customs Duties Are Unavoidable on Pirate Ship: The only way to avoid potential customs charges is to ship with a "Delivery Duty Paid" international service, which includes customs duties and fees in the price of postage.

    • All international services on Pirate Ship are "Delivery Duty Unpaid," which means labels do not include any duties and taxes paid.

Marketplaces may have prepaid some sales or Valued-Added Taxes (VAT)

If you made the sale on a marketplace like eBay, Etsy, or Amazon then some or all of the taxes your customer owes may have been collected and prepaid by the marketplace 💪

  • Marketplaces & Tax ID Numbers: If your marketplace collects and prepays any customs duties on your order, the marketplace will give you a Tax ID number. You'll need to enter this number in the Exporter International Tax ID field at the bottom of the customs form when creating the label in Pirate Ship.

Your customers shouldn't be surprised by their country's taxes

In general, your customers should expect to pay customs duties and import taxes if they've ever shopped internationally before. One strategy we've found helps with these situations is to properly set expectations at your point of sale.

  • Setting Expectations During Checkout: As long as you put some sort of notice in your checkout for international customers that they're responsible for any import taxes their country charges them, the expectation should be set correctly and everything should be smooth 👍

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