EXPLAINING KEY COMPONENTS OF LANDED COST

KEY COMPONENT 1:

CUSTOMS VALUE

The customs value of your purchase is the key determinant of duties and taxes assessed. It is therefore important that your e-retailer and you accurately report this value.

The Customs value of an item is normally the price at which the item is purchased, plus insurance and freight charges. As insurance and freight charges are not always listed or transparent to the online shopper, Customs may use flat rates to represent these values. See the Singapore example below, where Customs may use a flat rate of 9.5% of the FOB* value for imports from ASEAN Member States to represent insurance and freight charges when the information is not readily available.

EXAMPLE: STANDARD RATES APPLIED BY SINGAPORE CUSTOMS

SOURCE OF IMPORT

FLAT RATE FOR FREIGHT AND INSURANCE (% OF FOB VALUE)

AFRICA, CANADA AND USA

24.5%

EUROPE

19%

JAPAN, AUSTRALIA AND NEW ZELAND

19%

CHINA, CHINESE TAIPEI, KOREA, SRI LANKA, INDIA AND PAKISTAN

15.5%

MYANMAR, THAILAND, CAMBODIA, LAOS, VIETNAM, HONG KONG, PHILIPPINES AND INDONESIA

9.5%

PENINSULAR MALAYSIA

5%

* FOB is an international shipping term meaning the seller (exporter) is responsible for the cost of the purchased items, and transportation costs until the port of export. International freight, transportation and insurance changes are not included.

KEY COMPONENT 2:

CUSTOMS DUTY

The Customs duty is a tariff imposed on imports, calculated based on the commodity’s Harmonized System (HS) code and purchased item’s country of origin. HS codes and youri tem’s corresponding applicable duty rate can be found in the importing country’s tariff schedule.

Please note, the country of origin may be different from the country where point of distribution takes place. For example, a shopper in Malaysia purchases a handbag from a U.S.-based retailer in Amazon, but the handbag is made in China. In this case, the tariff rate of the handbag is determined by referring to the tariff rate for goods of Chinese origin, rather than the tariff rate for goods of U.S. origin.

asean logo

ASEAN IMPORT DUTY RATES

According to the implementation schedule of the ASEAN Trade in Goods Agreement (ATIGA), import duties for most products traded between ASEAN Member States are duty-free. For more information, please refer to www.asean.org

KEY COMPONENT 3:

DON'T FORGET THE TAXES

SALES TAXES OR VALUE ADDED TAXES (VAT)

BRUNEI | 10%

MYANMAR | 2-50%

CAMBODIA | 10%

PHILIPPINES | 12%

INDONESIA | 7%

SINGAPORE | 2-50%

LAOS | 10%

THAILAND | 7%

MALAYSIA

6% FOR SERVICES

5-10% FOR GOODS

VIETNAM | 10%