For US-based account holders, certain ShipStation Carriers will offer Pre-Paid Duties and Taxes Guaranteed on supported services when shipping packages from the US. With this guarantee you and your customer will not be hit with hidden fees at delivery, your customs fees will be paid at the same time you create the label. These advanced duties and taxes calculation and payment methods are currently available for UPS from ShipStation, FedEx from ShipStation, and DHL Express from ShipStation.
To use Pre-Paid Duties and Taxes Guaranteed you will need to accept the Pre-Paid Duties and Taxes Guaranteed Terms and Conditions pop-up and ensure you include Harmonization codes in your shipments. You can add the Harmonization Code to the Customs description of your Product Details so it automatically populates for an order. You can also add it manually to the customs declaration section of the Shipment Details before creating your label.
Once you have enabled Pre-Paid Duties and Taxes Guaranteed you will see Duties and Taxes (Guaranteed) as an additional line item in the Cost Review pop-up. This cost will be deducted from your balance, and it will be the final cost that is paid for the duties and taxes.
For US-based accounts the default DDP setting Set Guaranteed Prepaid Duties and Taxes as default for all International orders is enabled. You can adjust this setting by going into your International settings.
This section provides answers to frequently asked questions (FAQs) about the calculation, payment, and benefits of using Guaranteed Prepaid Duties and Taxes in Shipstation.
The Duty and Tax amounts that are present in your dashboard reflect the duties and taxes that will need to be paid for the goods you’re shipping to enter the country of destination.
When the option to pay duties and taxes through Shipstation is selected, Shipstation, together with our logistics network, handles payments of applicable duties & taxes to the relevant customs and tax authorities, to help ensure that your shipments pass as efficiently as possible through customs and to their intended destination, without extra charges or delays.
Answer: Yes. When shipping to the United Kingdom, for instance, the Value Added Tax (VAT) rate of 20% must be paid upon entry of items.
Many countries and regions, such as the EU, Canada, and others, have similar VAT requirements. This VAT amount is levied to ensure that foreign sellers are not able to sell at an effective discount relative to domestic sellers who are subject to the same VAT.
Duty amounts also often apply. Duty amounts are typically set based on percentages assigned to commodity codes (or Harmonized System Codes), commonly known as HS Codes, that apply to specific item types. For example, the HS code for a women’s cotton tee shirt is 6109.10, with many countries expanding this to 6109.10.00.
Percentages are set by individual countries. These percentages vary based on item type, material used, country of manufacture, and various agreements between individual countries and regions (ie, the EU).
Answer: Duty and Tax amounts can vary depending on several factors.
Different items may have a different duty rate due to the materials (e.g., cotton, polyester, fur) or methods (e.g., knitting, crocheting, weaving) used to create them, or due to the country of manufacture.
Additionally, Duty and Tax charges can be applied only on orders exceeding a certain value. For instance, there is currently no duty on orders destined for EU countries where the value is under 150 Euros (VAT does still apply).
Import Duty and Tax amounts are set at the country or regional (i.e., the EU) level.
Alternatively, it may be that the specific items you are sending qualify for free trade or a duty and tax exemption in the country of destination.
Duty and tax amounts are set at a country or regional (i.e., the EU) level and take into account factors such as the materials or method used to produce the goods, the country of manufacture, and their value.
Answer: Yes, it is a guarantee if you have provided accurate information regarding the contents and value of the items in your shipment.
If the contents and value are not accurate, extra charges may apply.
There are also some shipments for which ShipStation cannot calculate the duties and taxes. Therefore, the guarantee does not apply. For example, shipments with goods subject to excise taxes (e.g. cigarettes) or shipments that are planned for more than 90 days into the future. For more information, please see our terms and conditions.
Answer: Selecting a Duty-and-Tax inclusive shipping option helps ensure that orders are delivered efficiently and with full compliance.
This method ensures prompt payment of required import duties and taxes. That means shipments are not held at customs while the shipping carrier requests payment from the receiver.
It also gives you transparency and security at order creation, as it allows you to avoid subsequent order adjustment charges for duties and taxes that are not pre-calculated. Duty-and-Tax inclusive shipping options also benefit from significantly reduced import fees, such as disbursement and handling charges.
Answer: Duties and taxes are calculated based on several factors. An HS code (i.e. commodity code) and country of manufacture are required to calculate duties and taxes for your items and shipment.
You can request an HS code from Shipstation if you are unsure of any particular item. As a second step, the country of manufacture is required for each item.
Once all items in an order have an HS code and country of manufacture, a calculation for the applicable duties and taxes will be made. This calculation is based on the value of the particular items and the total order value.
Keep in mind that different items may have a different duty rate due to the materials (e.g., cotton, polyester, fur) or methods (e.g., knitting, crocheting, weaving) used to create them, or due to the country of manufacture.
Once you select a Duty-and-Tax inclusive shipping option, duties and taxes will be paid to the relevant customs and tax authorities. The shipment will move efficiently through customs without the recipient being asked to pay any fees. There will not be any adjustment fees on your account for duties and taxes as long as the guarantee applies and the items in the order contain accurate descriptions, HS codes, and values.
Answer: The Duty-and-Tax calculation includes import duties and carrier fees. It also covers Value Added Tax (VAT) or similar required import taxes like GST, PST, or HST that exist in different countries.
VAT and similar taxes are typically set as a percentage at the country-level and have low variability among different types of goods.
Duties are calculated on an item-specific basis, and can vary significantly for individual items depending on the item type, materials and methods used for production, country of manufacture, and item values.
When using a guaranteed Duty-and-Tax inclusive method, import fees such as disbursement fees and handling fees are also fully included. There will not be additional or subsequent fees, assuming the information provided for the items is correct.
Answer: An accurate duty and tax calculation can be made when individual items within the order have been provided with an accurate HS code (i.e., commodity code), as well as an accurate country of manufacture and item value.
You may input the HS code directly into Shipstation if you know it. Alternatively, you may request this from Shipstation within the dashboard. To allow Shipstation to determine an accurate HS code
Answer: If the HS code provided is incorrect, there is a possibility that the duties and taxes calculated will not match the duties and taxes that are ultimately charged on import to the country of destination for the shipment.
In this instance, there is the possibility that a subsequent charge for the corrected duty and tax amount will be charged to you.
Answer: If using the ShipStation HS code tool, providing descriptive item information is the best way to improve HS code accuracy.
Highly detailed information is not necessary. However, descriptive information on the intended use and materials used in the item is helpful. An example of an item description that will allow for an accurate HS code is Women’s Cotton T-Shirt.
If you input your own HS codes, be sure to use a reputable source of information and to identify the HS code that corresponds to your item, including the materials and method of manufacture.
Answer: No, it will not result in customs delays.
Using a duty-and-tax inclusive shipping option that is shipped DDP will allow shipments to pass more efficiently through customs and be delivered to their destination without the receiver being contacted.
Please note that incorrect item information, such as HS codes, item descriptions, or item values, may result in questions from customs authorities and shipment delays until resolved.
Answer: If a shipping option is used that is not inclusive of duties and taxes, there are two options.
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If the shipment is sent using a Delivered Duty Unpaid (DDU) or Delivered-at-Place (DAP) option, the shipment's recipient is typically asked to pay for any applicable import duties and taxes at the time of entry to the country of destination. This can result in delivery delays, and in some instances, the recipient may refuse the payment. That results in the shipment being returned to its sender.
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Alternatively, if the shipment is sent using a Delivered Duty Paid (DDP) method that is not inclusive of duties and taxes when selected, duties and taxes that are charged at the time of import to the destination country will be charged post-shipment to your account as an adjustment.
Answer: There are no specific restrictions on duty- and tax-inclusive shipments. However, we encourage these shipments to be sent promptly, as country-specific duties and taxes may change over time.
Shipments sent significantly later than the original label purchase and duty/tax calculation may be subject to additional charges if the applicable duties and taxes differ at the time of shipment.
Goods that are restricted from import in the country of destination are not supported for non-duty and tax inclusive or inclusive shipping.