Duties and Taxes for American Exporters

If you have overseas customers, chances are that you are very savvy when it comes to the process of exporting goods from the USA. For other companies who might be considering selling to customers Internationally, duties and taxes can be confusing and unnerving. After talking to many of our customers, the GlobalForwarding.com team identified that not understanding the import process is one of the main reasons companies sometimes hesitate to start selling product to overseas customers. This short article will provide you with an overview of what’s involved!

A tariff or duty (the words are used interchangeably) is a tax levied by governments on the value including freight and insurance of imported products. Different tariffs are applied on different products by different countries. National sales and local taxes, and in some instances customs fees, will often be charged in addition to the tariff. The tariff, along with the other assessments, is collected at the time of customs clearance in the foreign port. Tariffs and taxes increase the cost of your product to the foreign buyer and may affect your competitiveness in the market. So knowing what the final cost to your buyer is can help you price your product for that market. In addition, your buyer may ask you to quote an estimate of these costs before making the purchase. This estimate can be made via email, phone or in the pro forma invoice.

The first step in determining duty and tax information is to identify the product classification number, i.e. Harmonized System or Schedule B number for your product(s). More importantly, your goods won’t ship without this number on key shipping documents. The GlobalForwarding.com team can help you to identify this information. Once you know your product’s 10 digit Schedule B number, use the first six digits as the HS number. Now you can determine your product’s applicable tariff and tax rates for a specific foreign country you are shipping to from the United States. Opening up the rest of the world as sales territory can have huge impact for your bottom line, and the GlobalForwarding.com International team is available to help you with the entire process!