DE MINIMIS - WAIVER OF DUTIES AND TAXES

DE MINIMIS -

PURCHASES BELOW A CERTAIN VALUE ARE FREE FROM DUTY AND/OR TAXES

For efficiency purposes, most countries maintain a certain threshold under which duties and/or taxes are waived. This is because it may cost more to administer and collect the duties and taxes than to simply waive them. This threshold is called the “de minimisthreshold.”

ASEAN markets all have different de minimis thresholds. Today, both duties and taxes are waived under the various thresholds, but this may change in the future.

Most governments offer duty and tax waivers under de minimis based on cost, insurance and freight (CIF) terms. This means if the total value of your purchase, insurance and shipping charges fall below the de minimis threshold, duties and goods and services tax (GST) will be waived.

EXAMPLE 1 - SINGAPORE

Singapore’s de minimis threshold for shipments imported by air or post is S$400. For most products, applicable duties are zero, and the GST is 7%. If your purchase is valued at S$300, insurance is S$10, and freight charges are S$30, total CIF value is S$340. Because this CIF value falls below the $400 threshold, you will not need to pay applicable duties and GST.

EXAMPLE 2 - SINGAPORE

Singapore’s de minimis threshold for shipments imported by air or post is S$400. For most products, applicable duties are zero, and the GST is 7%. If your purchase is valued at S$380, insurance is S$10, and freight charges are S$30, total CIF value is S$420. Because this CIF value exceeds the $400 threshold, you should plan on paying applicable duties and a 7% GST based on the CIF value (S$29.40). Please note the entire value of your purchase + insurance + freight, and not the incremental value above the de minimis, is taxable.

EXAMPLE 3 - SINGAPORE

Singapore’s de minimis threshold for shipments imported by air or post is S$400. For most products, applicable duties are zero, and the GST is 7%. If your purchase is valued at S$420, insurance is S$10, and freight charges are S$30, the total CIF value is S$450. Because the CIF value exceeds the S$400 threshold, you should plan on paying applicable duties and a 7% GST based on the CIF value (S$31.50). Please note the entire value of your purchase + insurance + freight, and not the incremental value above the de minimis, is taxable.

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TIPS FOR COMPLIANTLY USING DE MINIMIS

  • All exporters / sellers and importers / online-shoppers are obliged to declare the true value of the purchased goods. Under-declaration is illegal. With product data increasing in quality, under-declaration is becoming increasingly easy to detect.
  • Some jurisdictions limit the number of shipments eligible for duty and tax waivers to one per day or per consignee, or both.
  • It is not wise to split up shipments so each fall under the de minimis threshold to avoid payment of duties and taxes. This is considered an offense by Customs Agencies. Such actions not only constitute abuse, but is also bad for the environment, and may cost you more due to additional shipping charges.

ASEAN DE MINIMIS THRESHOLDS

BRUNEI

BND 400

CAMBODIA

USD 50

INDONESIA

USD 75

LAOS

NONE

MALAYSIA

RM 500

MYANMAR

USD 50

PHILIPPINES

PHP 10,000

SINGAPORE

SGD 400

THAILAND

BHT 1,500

VIETNAM

VND 1,000,000