Any goods imported in China are submitted to a VAT of 13% or 17%.

The tax of 13% concerns only a specific category of good from the agriculture sector, and on a certain kind of utilitarian objects. For other goods, it is a tax of 17 % which will be applied. The input VAT (sale x VAT rate) is the amount of the VAT paid when a taxable product or a service is bought and, could be deductible a TVA downstream. Furthermore, it is the VAT amount of taxable goods or services submitted to the buyer by the seller. Chinese consumption tax (CT) is Applied on companies and organizations which produce and import: Taxable products, taxable products under the figure of consignment or taxable sales products. All products regarded as toxic to human health like: The tobacco, Alcohol, luxury goods (jewels, cosmetics) and top range products (cars and motorbikes) are taxable imported products to the consumption tax in China.

• For imported goods, consumption tax can depend on the type of product.
• Tax calculation can be done either based on « ad valorem » or on quantity.

Customs duties include importation and exportation taxes which represents 8 294 objects subject to a charge according to the customs tariff plan 2017/2018.  Customs duties are calculated either on the basis of « ad valorem » or on quantity.

IMPORT DUTIES

Customs duties applicable for importations of goods are divided in several categories:

• Customs Duties on most favored nations (MFN)
• Conventional customs duties
• Special Preferential customs duties
• General customs duties
• Quota customs duties (RQT)
• Temporary cutoms duties

CUSTOMS DUTIES ON MOST FAVORED NATIONS (MFN)

MFN taxes (Most Favored Nation) are the most often followed customs duties.

Broadly speaking, it is widely less important than overall rate Applied on non – MFN countries. Products concerned by This taxes are :

• Imported goods towards China from a WTO member country.
• Goods from countries or Territories having ratified a bilateral trade agreement which stipulate the provisions of the application of MFN taxes with China.
• Goods from China

CONVENTIONAL CUSTOMS DUTIES

It is Applied on imported goods from countries or Territories having ratified a regional trade agreement which stipulates the provisions on customs duties with China.

SPECIAL PREFERENTIAL CUSTOMS DUTIES

It is Applied on imported goods from countries or Territories having ratified a trade agreement which stipulates the provisions of preferential laws with China.

In general, these tariffs are lower than MPF rates and conventional customs duties.

GENERAL CUSTOMS DUTIES

The general tax is enforced on imported goods from countries or Territories with any agreements and treaties or from unknown origin.

QUOTA CUSTOMS DUTIES

The tariff quota law submitted imported goods to a lower tariff rate. For imported goods which outreach quotas, there is a more significant tariff rate.

For example, respecting the quota, tariff quota Applied on soft wheat is 1% – It is significantly lower comparing to MPF (65%) and to general customs duties (which represents130 % of tax applied).

TEMPORARY CUSTOMS DUTIES

In 2016, China have been adopted these temporary customs duties which are lower than MPN.

These 787 imported Products concerned by this tax are:

• Baby diapers (2%)
• Sun glasses (6%)
• Kaolinite (1%)
• Health care products (Skin cosmetics = 2%)

Since 1th June 2015, China decreased its customs tariffs for 14 types of goods.

This Measure has been put into practice due to the decision made by the Chinese government of changing its tax policy for encouraging and increasing the domestic consumption.

Here is the list of imported goods concerned by customs duties:

• Cosmetics 2 % instead of 5%
• Shoes 12% instead of 22%
• Products made from fur 10% instead of 23%
• Outside clothes: 8 to 10% instead of 17,5 to 24%
• Cashmere and hosiery items: 7% instead of 14%
• Baby diapers : 2% instead of 7,5%

OTHER CUSTOMS DUTIES

In China, there is other customs duties with a higher tariff.

It was a necessary decision to make in order to fight against dumping, misuse of funding’s and implementation of safeguards.

When a country does not respect a trade agreement, it is possible to apply this kind a deterrent measure, but it is exceptional.

DUTY APPLIED TO TECHNICAL EQUIPMENT

In 2017, has been published a “catalogue of products and technical equipment’s approved by the government “since 1st January 2018.

Taxes and customs duties on imported products are calculated in function of the value of the article and the price paid by the buyer.

It is called Duty Paying Value (DPV)herefore, export some specific tools is not anymore subject to customs duties for Chinese companies (Tariffs depending on the goods which are imported).

DPV takes freight charges and insurances into account, however customs duties and paid taxes are not.

HOW IT IS POSSIBLE TO CALCULATE TAXES AND IMPORT DUTIES?

It is possible to calculate import tax and customs duties in relying on the DPV (Duty Paying Value) and tax rate on goods.

• Importation
• Exportation

A few of raw Materials picked and semi-finished products are subject to customs duties. In 2016, some products including crude oil, fertilizers or iron alloys are submitted to temporary customs duties to preserve natural resources

Import Duties calculation
	DPV x Customs tariff
	Quantity of imported goods x cost of customs duties per unit
	DPV x Tariff + Quantity of imported goods x cost of customs duties per unit
	Calculation with RMB method and strandard exchange rate from The People’s Bank of China.

IMPORT AND EXPORT CUSTOMS DUTIES ARE CALCULATED WITH THE DPV

For exportation, DPV is based on a negotiate Price, it means on the price paid by the local seller who is exporting.

CUSTOMS FEES AND TAXES IN CHINA

In order to make your shipment between China and UAE, Qatar, Saudi Arabia, South Africa,Egypt,Kenya, and others more efficient, Presou Logistics experts in Customs issues, will do for you all the necessary formalities.

These administrative aspects are complicated, and any mistakes could retard and even stop completely the shipping.

For preventing these possible issues, entrust your goods transportations to our Presou Logistics expert, who we will take over the transit of your goods to the destination.

Our experts located in China guarantee you an efficient and quick management of your customs formalities.

IMPORTATION PROCESS IMPLEMENTED BY CUSTOMS.

The customs clearances can take times and retard your shipping. In order to prevent from that, it is recommended to anticipate the declaration of all the information whose customs need.

After having submitted the shipment of your goods, you will help for the good execution of the shipping between these two countries.

The declaration of goods submitted to customs authorities can be done by Internet. You only need to Connect to the web site and indicate the delivery address and some information’s.

After having complete all the information, an analysis will be done to confirm the delivery of your goods.

The payment on customs duties is done by bank transfer.

Documentation that it must be provided to customs authorities will depend on the category of the product transported.

However, some documents are mandatory:  Bill of landing, receipt, la facture, packing, customs declaration insurance, sales contract.

The customs clearances can take times and retard your shipping. In order to prevent from that, it is recommended to anticipate the declaration of all the information whose customs need.

After having submitted the shipment of your goods, you will help for the good execution of the shipping between these two countries.

The declaration of goods submitted to customs authorities can be done by Internet. You only need to Connect to the web site and indicate the delivery address and some information’s.

After having complete all the information, an analysis will be done to confirm the delivery of your goods.

The payment on customs duties is done by bank transfer.

Documentation that it must be provided to customs authorities will depend on the category of the product transported.

However, some documents are mandatory: Bill of landing, receipt, la facture, packing, customs declaration insurance, sales contract.

SPECIFIC PROCEDURES OF IMPORTATION

Some categories of products need a specific inspection such as Agri-food products (by the Health service)

It exists also some categories of products forbidden to import in China such as:  weapons, documents which could push the Chinese government back and the economy or poison, drugs, some animals, hazardous plants, food or medicine from countries affected by diseases.

SAMPLE IMPORTATION

All samples imported in China have to be declared to the customs authorities for inspection. Samples and goodies are taxable according to the product code (HS) Number and nature. Only a few exceptions exist.

Goods intended to exhibition or demonstrations for fairs/ commercial events are not submitted to customs duties

A TEAM OF EXPERTS ONLY FOR YOU

Are you looking for a Chinese multilingual forwarder which is able to deliver an efficient and a complete service?

Contact Presou Logistics for your next shipment.

CUSTOM VALUE OF GOODS WHEN YOU IMPORT:

General rules for determinate the value according to customs authorities.

The method Applied by all customs in the world is based on HS code and the declared value of goods.

It is evaluated to determinate duties and taxes. If you have any regulatory questions, contact the economic action center and general direction of customs in your region.

IN THE CASE OF SALE OF GOODS IMPORTED

When goods are sold during the importation, an evaluation is done according to the transactional value.

Also, it could have an increase or decrease in accordance with fees to ad or to reduce on its value.

FACTORS ADDED ON THE PRICE

Here the list of cost, products, delivery on production, usage and transit:

• Commissions on sales
• Cost of packaging
• Price of contribution
• Cost of amount fees and license fees
• Value of each part of the product
• Cost of transportation, insurance and handling fees

Each factor which is added to the paid price or to be paid has to be based on datas which are objective and measurable.

FACTOR DEDUCTIBLE TO THE PRICE

After the importation of some goods, there are some costs which are not to be consider and not to be included in the paid price/ to pay.

• Fees on works
• Cost of post-shipment transportation.
• Duty and taxes on sales or importation
• Reproduction right
• Purchase Commissions
• Interest on deferred payment

All these fees are deductible on the cost when they have not been included in the price and the most import thing, when it is possible to quantify and identify it.

WHEN THERE ARE NO SALES OR A REJECT OF THE TRANSACTION VALUE

In the case of imported goods whom the aim is not to be sold like free goods, imported consignment goods, borrowed or rented objects etc. Or, when the transactional value is rejected.

In these case, we have different method to determinate the value:

Comparative method	Transactional value allows us to establish the custom value which is accepted by customs authorities and concerns the same goods, from the same country, imported at the same time and with the same commercial value.
Deductive Method	Value is fixed from a resale cost
Calculated value	We determine value according to the cost of raw materials, the manufacturing process, profits and shipment costs.
Last resort Method	Here, reasonable ways are used in giving objectives that we can easily quantify.
Generally, this application is aimed to use one of the methods in the simplest way. It exists two others case to consider it, which are the AVP and the AJ as well.

What does customs clearance in China mean?

Customs clearance in China. From Wikipedia, the free encyclopedia. Customs clearance can be conducted at any one of the many customs offices in China. A commercial invoice, packing list and the CIF (cost, insurance, and freight) must be provided for the shipment.

What is the import duty in China?

All goods imported into China are subject to the nation’s value-added tax (VAT) of either 13 percent or 17 percent. The 13 percent tax is available for certain goods that fall mainly within the categories of agricultural and utility items, while the 17 percent tax applies to other goods subject to the VAT tax.

How much does customs clearance cost?

The customs clearance covers the process of preparing and submitting Customs Entry documentation to the CBP. This is also known as Customs Brokerage. Customs Clearance Fee Tips: The standard rate for Customs Clearance is around $50 for clearance with China’s Customs and $100-$120 for clearance with CBP.

How is customs duty calculated?

Each country determines the assessment of duties and taxes differently. … Duties and VAT are calculated as a percentage of the customs value of the goods (item + insurance + shipping). Any duties and taxes on your international shipment will be billed directly to you by the global carrier.

What happens if you don't pay customs?

There is no way of you taking possession / ownership of the goods unless you pay Customs duty i.e. if you don’t pay the Customs duty, you can’t take delivery of goods from Customs.

Do I need an import license to buy goods from China?

Do I Need a Permit to Import from China? There is no general import permit for importing products from China. However, you might need a permit to import from a federal agency certain goods from China. Different federal agencies oversee different imported products and requirements can vary.

First of all, you must know that it isn’t mandatory for a freight forwarder to insure the shipment of a client.

Also, depending on the incoterms used for the transfer, the insurance may be included or not in the freight service. Most of the time it isn’t, so the customer has the responsibility to verify if its shipment is covered. Then he can ask for an insurance where appropriate. Also, there isn’t unique insurance policies protecting your goods from A to Z.

Even more when your goods are transiting through several countries. For example, there is insurance for the warehousing, for the freight between two countries, or for a sea transit which is bulk in nature… No insurance companies are providing an “all inclusive” insurance package.

For a freight, via cargo vessel or other methods, Presou Logistics can provide you a freight insurance. It will cover your goods from damage and breakage. Without subscribing to an insurance, you’re exposing yourself to unpredictable problems.

In fact, carriers are lightly impacted in case of loss of your goods or delay of delivery. The financial compensation that you will receive depends on the value of your shipment and the type of shipping.

Presou Remark: Conditions vary depending on the transport, national or international but also on the declared value of your goods.

We negotiated with the best certified insurers to select the most attractive package for our clients, both in terms of cost and safety. Our insurance is limiting considerably the risks for your enterprise. A supply loss can be terrible for your business.

WHAT IS THE FREIGHT INSURANCE?

Legally, it is a contract established between an insurance company and an insurance holder. All carriers have to bear a minimum insurance rate, known as “Carrier liability”.

However, the carriers’ responsibility brings a tiny coverage. It is called the “Hull insurance”, which covers the body of the ship, its equipment and sometimes its crew from natural disasters, vehicles accidents or war acts. As you understand the shipments are not covered in this situation, so we cannot say it’s a reliable coverage.

Presou Info: Consequently, shippers can ask for a cargo-insurance to protect their goods against losses, damages or theft. Usually, the goods are covered during their warehousing and their transport, until they reach their destination.

WHAT ARE THE LIMITS OF THE FREIGHT INSURANCE?

This cargo service is limited, of course. For instance, during a shipping by truck in the USA, the freight insurance doesn’t protect against all losses that can be caused by the carrier, under certain laws. There is no unique form of cargo insurance, that a carrier could buy to be totally covered.

There are several types of cargo insurance, some are named “all-risks”, “large form”, “legal liability”, and “trucking freight”. What you must know is that depending on the events that caused the damage, loss or else, you may not be covered.

*Usually, it is important for the shipper to document their cargo value in case of dispute, loss or damage. You might also work with an agent and an attorney to understand the process and be sure that you’re covered.

HOW MUCH WILL COST MY CARGO INSURANCE?

*It depends on your items and freight value.

Presou Note:  The method of calculation of your insurance cost is the following. You’re additioning the value of your goods and the value of your freight, then you apply a 1-3% factor on it, depending on your products’ category.

Your insurance cost = (Goods’ value + Freight value) x 1-3%

The cargo insurance can be taken for national and international transport. It is very hard to standardise an insurance in different countries at the same time. We can divide this insurance in several categories:

TRANSFER INSURANCE

The transfer insurance is covering freight charges for non-delivery of the goods. This will provide you a reimbursement by the insurance company, if the goods are not being delivered, or if the freight contract is not honoured by the freight company after being paid. In case of a delay, this insurance is not applying. It can be useful if the freight is as expensive as your goods.

MARINE CARGO INSURANCE

Despite its name, this insurance covers your goods and commodities for an air, land or sea transport. It covers trucks, vessels, planes and other vehicles. Here, the transport and the goods are covered against damages caused by the loading/unloading, climate, piracy, thefts, accidents and other problems.

Mainly, it covers international transport. Your goods will be covered during transhipment processes also.

Presou Info : To know more about our air or sea services, do not hesitate to visit our dedicated pages: Air freight and Sea freight

*There are policies that can help you to understand more about these concepts.

These policies are :

• Open insurance loading policies: There are two offers about this policy, the renewable or the permanent policy. A renewable policy must be renewed after each police control, contrary to the permanent one. The permanent policy can be established for a definite period allowing unlimited shipments within this period.
• Particular average policies: When an enterprise reaches an insurance company or an insurance broker, they can ask for a specific freight policy. These policies are also called journey policies because a single journey will be covered by the insurance contract. It’s a type of insurance in which losses are only recovered by cargo owners, regarding particular average loss.
• Conditional insurance policy: In certain cases, not the seller but the customer is responsible of the insurance of the goods against loss or damage. There are risks for the client, if some goods are damaged during the transport and he refuses to accept them. In some cases, customers are not covering their goods and are denying their responsibilities. In such circumstances, sellers can ask for a financial compensation in front of a law court. This can become very expensive to one of the parties involved in the dispute.

Presou Remark : To have further information about the air freight insurances, please visit Federal Aviation Administration – Safety Assurance System (SAS)

This service is covering transfer by air, sea, road or rail. Thanks to this insurance, the following aspects are covered:

ALL-RISKS INSURANCE

This coverage offers an extended protection against damages and losses caused by external factors. However, despite the “All-risks” name, you must know the included and excluded aspects of the contract. This insurance covers your goods against:

• Damages caused by an inappropriate packing
• Cargo desertion
• Infection
• Customs reject
• Dishonest employee

FREE OF CHARGE COVERAGE (RELATED TO MARINE INSURANCE)

The coverage clause “free of charge” excludes the coverage of partial losses on the cargo, except those that results of the grounding, the break down, the combustion or the collision. Another important aspect is that the shipper doesn’t pay for the minor losses (percentage determined at the beginning) and can be liable only in major cargo losses case. This coverage belongs to a special category and covers only precise risks. There is a difference of coverage depending on the warehousing place.

Here are the risks included in this policy :

• Collision
• Delays
• Derailment
• No delivery
• Theft
• Fire
• Earthquake

GENERAL AVERAGE COVERAGE

This coverage is a staple requirement for ocean freight. More precisely, it only covers a partial loss of the shipment. This requires that all the other shipment owners pay amenities to the proprietor of the lost cargo. The value amount is shared proportionally to the value of other cargos onboard, so other owners that are possessing goods on the vessel will pay a part of the missing one.

WAREHOUSING COVERAGE

The contract is applicable when the shipment is discharged of the vessel and transported to the client’s warehouse. Insurers will only compensate for the insured cargo, and not for cargo of other proprietors.

IN WHICH SITUATIONS A MARINE CARGO INSURANCE IS NECESSARY?

For security, because in international trades, competition is rough on markets. Insurances are unneglectable to protect shipments from the occurrence of a bad event, as it can be lethal and ruin an enterprise if there’s a missing.

In some countries, the customs duties are calculated with the CIF value of the products as a base. So, if there aren’t any insurance documents testifying of the coverage of the goods, customs officials might decide to increase the customs duties.

SO, SHOULD YOU ASK FOR A FREIGHT INSURANCE?

After reading this article, we hope that you realise how important it is to insure a cargo for a freight. Otherwise, think about the impact you may face in case of troubles.

• How your enterprise will endure a full cargo loss?
• What to do if the vessel transporting your cargo is going underwater?
• What if the truck handling your freight is involved in a major collapse?
• Your enterprise is liable for part of the losses. How can it affect you?

Accidents can happen. Consequently, shippers must ask a freight insurance to protect their enterprise when bad events are occurring. If you want to know more about the protections adapted to your situation, don’t hesitate to contact Presou Logistics, we are always happy to help.

What is transport insurance?

The law requires each courier to take out certain mandatory policies, this is called carrier’s liability. But this is small and covers a very small range of risks such as natural disasters, vehicle accidents and acts of war that could damage your goods. For this reason, many deliveries are insured through cargo insurances in order to insure against damage.

Does the transport insurance have limits?

Cargo insurance can have weaknesses, especially when you carry out road freight in the USA, you will not be protected against all damages due to the specific legislation of each state. Moreover, no such insurance can provide complete protection against risks.

What is comprehensive insurance?

This insurance offers a high level of protection against damage or loss due to external factors. In spite of the name of this insurance, there are some aspects that you should be aware of that are taken into account and not taken into account in the contract.

What is the purpose of the special average coverage?

This coverage does not include compensation for partial loss of cargo or hull unless caused by sinking, grounding, collision or combustion. An important point about this coverage is that the seller is not liable and will not have to compensate anything if the loss of the cargo is significant.

What's the warehouse cover for?

It is when the goods are unloaded from the ship and transported to the warehouse of final destination that this contract is applicable. Only the holder’s merchandise will be compensated by the insurer and not that of another owner.