If you've ever sent or received goods internationally, you're likely familiar with paying import duty. You may have noticed that the duties vary depending on the product and its origin. This is because each country has different duty rates based on the type of product, its Harmonized System (HS) code, and other factors. These varying approaches to assessing duty are known as calculation methods.
Calculation Methods
Ad Valorem Based on CIF (Cost, Insurance, and Freight): This method calculates import duties based on the order's value plus the cost of freight, insurance, and the seller's commission.
Ad Valorem Based on FOB (Free on Board): This method calculates import duties solely on the cost of the goods sold, excluding shipping, duty, insurance, and other fees.
Weight: This method calculates import duties based on the weight of the goods.
No Duties Assessed (Free Port): This isn't a calculation method but a situation where countries do not impose any import duties, making imports duty-free.
Calculation Method by Country
After discussing the various duty calculation methods and their specifics, let's explore how these methods are applied in different countries.
Duties based on FOB
COUNTRY CODE | NAME |
AS | American Samoa |
AU | Australia |
BW | Botswana |
CA | Canada |
GU | Guam |
HT | Haiti |
LS | Lesotho |
NA | Namibia |
NZ | New Zealand |
SZ | Swaziland |
US | United States |
VI | Virgin Islands |
ZA | South Africa |
Duties based on weight
COUNTRY CODE | NAME |
CH | Switzerland |
LI | Liechtenstein |
No Duties
COUNTRY CODE | NAME |
HK | Hong Kong |
KI | Kiribati |
MO | Macao |
SG | Singapore |
Duties based on CIF
Any country not listed above typically uses the CIF calculation method. It is the most widely used duty calculation method globally.