Import duty

Import duty is fee collected by a country's customs authorities on goods imported from other countries. The duty amount is calculated based on the value and classification of the goods, and varies depending on the country’s regulations and duty de minimis values.

Calculate import duty with Zonos Landed Cost 

Zonos Landed Cost processes hundreds of thousands of landed cost quotes per day. Duty rates are one of the most complicated components when calculating a total landed cost. Often, either a simplified duty is charged or duty is not charged at all on low-value imports.

We decode cross-border fees to create transparency in ecommerce. Transparency is important to ensure that an exporter can trust the calculations to accurately determine duties and taxes with the least amount of cost and effort, assess how much time and effort is needed to harmonize a catalog, and provide thier customers with a positive shopping experience.

Import duty calculations

Zonos will calculate duty with or without an Harmonized System (HS) code, however, an HS code can increase the accuracy of the calculation (and is required to receive a full landed cost calculation). Zonos' calculations include reduced rates, simplified rates, and the impact of de minimis values. As shown in the landed cost object, the duty rates are returned on a per-item basis with descriptions for the duty rates.

{
  "id": "ldct_1Ce6vt2eZvKYlo2CrgzPqxaz",
  "amount_subtotal": {
    "duties": 9.85,
    "fees": 21.0,
    "taxes": 29.11
  },
  "duties": [
    {
      "amount": 7.5,
      "description": "Duty",
      "formula": "10%",
      "item_id": "294395",
      "note": null,
      "type": "item"
    },
    {
      "amount": 2.35,
      "description": "Duty",
      "formula": "10%",
      "item_id": null,
      "note": null,
      "type": "shipping"
    }
  ]
}

Duty de minimis 

When the goods' combined value in a single shipment is below the duty de minimis (the value threshold that exempts imports from duty and/or tax), the item will clear without any duty collection; however, import tax may still be collected if the tax threshold is lower than the duty threshold. The opposite scenario is not possible because countries always set the duty threshold higher than the tax theshold.

The duty de minimis qualification is returned in the landed cost object. When the amount is below the de minimis threshold ("threshold": "below"), duties will not be applied to the import.

{
  "id": "ldct_1Ce6vt2eZvKYlo2CrgzPqxaz",
  "amount_subtotal": {
    "duties": 0,
    "fees": 21.0,
    "taxes": 29.11
  },
  "de_minimis": [
    {
      "formula": "Less than 150 EUR",
      "method": "cif",
      "note": null,
      "threshold": "below",
      "type": "duty"
    }
  ]
}

When a request is under the duty threshold in Checkout, Quoter, or Hello, the app will inform the shopper.

{
  "de_minimis": [
    {
      "formula": "Less than 150 EUR",
      "method": "cif",
      "note": null,
      "threshold": "below",
      "type": "duty"
    },
    {
      "formula": "Less than 22 EUR",
      "method": "cifd",
      "note": null,
      "threshold": "above",
      "type": "tax"
    }
  ]
}

The method demonstrates the formula used for the duty calculation.

Using an HS code 

Whether a Harmonized Syste (HS) code is provided or not, Zonos will calculate duty, including reduced rates, simplified rates, and the impact of de minimis values. If you do not pass an HS code in the request, the default HS code set during account creation will be used for the calculation. Duty rates are returned on a per-item basis with descriptions for the duty rates as shown in the landed cost object.

All duty charges in the landed cost calculation are derived from an HS code. If the HS code is for the wrong country, (e.g. an eight-digit HS code for Canada is provided on a request for a landed cost quote intended for Ireland), the code will be trimmed to the universal six digits for calculation. The response will contain a note indicating the code was trimmed due to a mismatch.

The landed cost object will contain the source of the HS code calculation: hs_code_source. There are five possible sources for an HS code that can be returned in the response. The zonos_catalog source will take precedence over any other source and will be used to match the appropriate duty rate of the item.

{
  "id": "ldct_1Ce6vt2eZvKYlo2CrgzPqxaz",
  "customs": {
    "amount_shipping": 25.0,
    "delivery_duty_paid": "available",
    "items": [
      {
        "id": "294395",
        "amount": 75.0,
        "country_of_origin": "FR",
        "country_of_origin_source": "api_request",
        "description_customs": "Footwear with outer soles of leather or composition leather",
        "description_retail": "Hoka One Running Shoe - Women's",
        "detail": null,
        "dimensions": {
          "height": 4.0,
          "length": 6.0,
          "unit": "inch",
          "width": 11.0
        },
        "hs_code": "6404.20",
        "hs_code_source": "account_default",
        "image_url": "https://zonos.com/images/handbag.png",
        "note": null,
        "quantity": 1,
        "upc_code": null,
        "weight": 10.0,
        "weight_unit": "pound"
      },
      {
        "id": "294396",
        "amount": 100.0,
        "country_of_origin": "FR",
        "country_of_origin_source": "platform",
        "description_customs": "Footwear with outer soles of leather or composition leather - For Women",
        "description_retail": "Hoka One Running Shoe - Men's",
        "detail": null,
        "dimensions": {
          "height": 4.0,
          "length": 6.0,
          "unit": "inch",
          "width": 11.0
        },
        "hs_code": "6404.20.20",
        "hs_code_source": "platform",
        "image_url": "https://zonos.com/images/handbag.png",
        "note": null,
        "quantity": 1,
        "upc_code": null,
        "weight": 10.0,
        "weight_unit": "pound"
      },
      {
        "id": "294397",
        "amount": 125.0,
        "country_of_origin": "FR",
        "country_of_origin_source": "platform",
        "description_customs": "Other footwear - With uppers of leather or composition leather",
        "description_retail": "Hoka One Running Shoe - Children's",
        "detail": null,
        "dimensions": {
          "height": 4.0,
          "length": 6.0,
          "unit": "inch",
          "width": 11.0
        },
        "hs_code": "6405.10",
        "hs_code_source": "api_request",
        "image_url": "https://zonos.com/images/handbag.png",
        "note": "hs_code_not_found Hs code trimmed to six digits due to a mismatch",
        "quantity": 1,
        "upc_code": null,
        "weight": 10.0,
        "weight_unit": "pound"
      }
    ],
    "ship_to_country": "FR"
  }
}

Managing country of origins 

A country of origin can impact the duty amount applied to an import due to trade agreements, laws, etc.

The country of origin can be set in the "items" array within the LANDED COST REQUEST API and requires a two-digit ISO code. See the ISO code reference sheet in our guides for a full list of 2-digit ISO codes.

{
  "items": [
    {
      "id": "294395",
      "amount": 75.0,
      "country_of_origin": "FR",
      "description_customs": "Telephones for cellular networks or for other wireless networks:",
      "description_retail": "Smartphone XL - 128 GB - Black",
      "hs_code": "8517.12",
      "quantity": 1
    }
  ],
  "shipping": {
    "amount": 25.0,
    "landed_cost": "delivery_duty_paid"
  }
}

Catalog management 

If you prefer, you can manage countries of origin and HS codes in Zonos Catalog. Catalog entries for products will take preference in determining the country of origin.

For example, if product id: 294395 was added to your catalog with CA as the country of origin but a request was sent with FR as the country of origin, the CA country of origin would take precedence and be used for determining any possible duty rates for that item.

We'll calculate the preferential duty rate with a qualified country of origin. By default, other trade agreements are not enabled because many times smaller exporters don't have proper documentation and processes in place to receive the eligible reduced rate for all trade agreements. Additional trade agreements can be applied to your landed cost calculation upon request. To enable additional trade agreement preferences, contact us for assistance.

Selecting a tariff 

Small, medium, and even large companies don’t have their products harmonized very often. If they do, the products are usually only harmonized to the sixth digit. Additionally, the items may not have a country of origin. The majority of duty and tax calculators are unable to calculate duty and tax without an eight-digit code and a country of origin. Landed Cost can calculate duty, even in cases where data is incomplete.

When only a six-digit HS code is available, the duty amount applied at the time of calculation uses a safety net by selecting the rate from the maximum dutiable HS code from the subset of country-level HS codes. This can be controlled at the API level by sending maximum, median, minimum, or zonos_preferred in the landed cost request. The selection of a median tariff allows for a cleaner calculation of specific duty rates instead of attempting to calculate the average. The median tariff is the middle tariff calculation in an ordered list. Below is an example of sending a median code in the rate request.

{
  "tariff_rate": "median"
}

Selecting an ad valorem tariff

An ad valorem rate is simply a percentage. Example of country-level ad valorem tariffs available if a six-digit code of 6109.90 is supplied:

In this example, by default, the maximum tariff 6109.90.10 would be used since it has the highest duty rate (32%). The landed cost object would return the six-digit HS code in items.hs_code and the duty percentage would be displayed in duties.formula.

{
  "id": "ldct_1Ce6vt2eZvKYlo2CrgzPqxaz",
  "customs": {
    "amount_shipping": 20.0,
    "delivery_duty_paid": "available",
    "items": [
      {
        "id": "294395",
        "amount": 75.0,
        "country_of_origin": "FR",
        "country_of_origin_source": "platform",
        "description_customs": "T-shirt - Of man-made fibers",
        "description_retail": "Stranger Things Women's T-shirt - Red",
        "detail": null,
        "dimensions": {
          "height": 1.0,
          "length": 1.0,
          "unit": "inch",
          "width": 1.0
        },
        "hs_code": "6109.90",
        "hs_code_source": "Account default HS code",
        "image_url": "https://zonos.com/images/handbag.png",
        "note": null,
        "quantity": 1,
        "upc_code": null,
        "weight": 1.0,
        "weight_unit": "pound"
      }
    ]
  },
  "duties": [
    {
      "amount": 24.0,
      "description": "Duty",
      "formula": "32%",
      "item_id": "294395",
      "note": null,
      "type": "item"
    }
  ]
}

Selecting a specific tariff

Specific tariffs are based on a unit amount, such as weight—a specific duty amount is returned per unit. Example of country-level specific tariffs available if a six-digit code of 9105.19 is supplied:

The rate used in this example would default to the code 9105.19.10, which was the highest rate⁠ (0.20 RUB per unit). The landed cost object would return the six-digit HS code in items.hs_code and the specific duty rate would be displayed in duties.formula.

{
  "id": "ldct_1Ce6vt2eZvKYlo2CrgzPqxaz",
  "customs": {
    "amount_shipping": 30.0,
    "delivery_duty_paid": "available",
    "items": [
      {
        "id": "294395",
        "amount": 75.0,
        "country_of_origin": "FR",
        "country_of_origin_source": "api_request",
        "description_customs": "Clocks - Other",
        "description_retail": "Standard Atomic Clock - Black",
        "detail": null,
        "dimensions": {
          "height": 12.0,
          "length": 12.0,
          "unit": "inch",
          "width": 2.0
        },
        "hs_code": "9105.19",
        "hs_code_source": "Account default HS code",
        "image_url": "https://zonos.com/images/handbag.png",
        "note": null,
        "quantity": 20,
        "upc_code": null,
        "weight": 5.0,
        "weight_unit": "pound"
      }
    ]
  },
  "duties": [
    {
      "amount": 4.0,
      "description": "Duty",
      "formula": ".20 RUB per unit",
      "item_id": "294395",
      "note": null,
      "type": "item"
    }
  ]
}

For duty rates applied per weight, the item's weight and/or dimensions will be needed to accurately calculate the duty; however, if weight or dimensions are not available for an item, Landed Cost can use the average weight and/or dimensions for the calculation.

Selecting from a mix of ad valorem and specific duties

Some duty calculations consist of a mixture of ad valorem and specific duty rates; if this is the case, the maximum, median, minimum, and Zonos-preferred calculations are based on the highest duty amount.

The rates used in this example would be from code 8205.51.75 with the highest calculated amount of 8.70.

Next steps

You now have an understanding of how duties are calculated in a true landed cost. Next, you may want to dive into tax calculations or start adding clearance fees to your duty and tax calculations.

• Import taxes - Learn how import taxes are calculated.
• Landed Cost - Get an overview of the Landed Cost product and how it works.
• Import clearance fees - Find out how a landed cost is not complete without clearance fee calculations.

Related Decoder Guides

• Total landed cost - Learn what makes up a landed cost.
• Duty on international returns - Avoid paying duty on returns into the US and Europe when possible.
• De minimis values - View de minimis values by country and their thresholds.

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