What is duty and tax?

Duty and tax are set and charged by the authorities and FedEx applies the rates set by the authorities in the customs declaration.

Duty is a type of tax charged on products being shipped across international borders and is controlled by each country’s customs authorities. The purpose of duty is to ensure the cost of imported goods is the same cost as those produced locally to keep competition fair.

One of the most common taxes is Value Added Tax, which is charged on goods bought and sold for use or consumption in a country. It may be charged at the moment of importation or at the moment of sale in the origin country.

Tax can be referred to differently depending on the individual country, for example VAT (Value Added Tax) in the UK, GST (Goods and Services Tax) in the U.S., TVA (Taxe sur la valeur ajoutée) in France, BTW (Belasting Toegevoegde Waarde) in The Netherlands and Ust (Umsatzsteuer) in Germany. 

How is duty and tax applied?

Duty and tax are dependent on the HS code and country of origin. Generally, tax is a percentage of the value of the goods with some goods being zero rated in some countries, such as children’s books and some food stuffs.

In general, the calculations are based upon the goods description provided on the commercial invoice and its HS code. However, other factors such as origin and reason for import may all contribute to the overall value and percentage of duty and tax applied. Some commodities are also subject to other charges such as excise duty which is an additional tax based on quantity, examples are goods like alcohol. Goods that are subject to trade defence measures and other restrictions may also incur extra charges.

How is duty calculated?

Duty is calculated against the value of the shipment contents declared on the commercial invoice, together with any insurance costs and a percentage of the transportation cost. This is known as the Value for Customs. This value is then multiplied by the duty percentage of the HS code.

Who has to pay? 

Generally, there are two options. The first option is for the receiver to pay the authorities directly for any duties and taxes, usually when the shipment is imported. VAT in some countries can be deferred or postponed depending on the import country revenue procedure. Duty is usually paid to the authorities at the time of import – except for specific customs procedures authorized in advance.  

The second option is for FedEx to pay the authorities on behalf of the recipient. This is generally paid using our own deferment account which operates similar to a bank account with a direct payment to the authorities. FedEx will then invoice the receiver for this payment with a disbursement fee for the service. 

Please note that duties and taxes will be charged to the recipient by default, unless the shipper marks the ‘Bill Shipper’ option on the air waybill at the time of shipping. Also note that if the recipient declines the shipment or refuses to pay, the shipper is ultimately liable for any duties and taxes assessed on the shipment. 

What is the Disbursement Fee?

FedEx may pay the duty and tax charges on your behalf to ensure we can deliver your shipment as quickly as possible. That means there’s a fee, also known as a Disbursement Fee (which is part of our ancillary charges). Please see our ancillary clearance service fees page to see the charge at destination country.

Why didn’t FedEx advise me of this at the time of delivery? 

Where possible, we will contact you in advance with the estimated cost of duties and taxes to arrange the payment.

However, this isn’t always possible as we may not have received confirmation of the exact amount to be paid or been able to invoice you until after we have delivered your package.

I pre-paid duty and tax charges before delivery so why have you charged me?

Tax is generally applied by the authorities at the time of import. If you have paid the tax to your supplier and this is not clearly indicated on the paperwork supplied by the shipper then FedEx will not be aware of this. You will need to discuss this with your supplier and ensure that for future shipments, the correct Billing Terms are selected when completing the FedEx air waybill, and the appropriate Incoterms are used on the commercial invoice for future shipments.

Why have you invoiced me for a different amount of duty and tax to your original estimated figure?

At the time of import, you may be charged an estimated figure. This is calculated prior to an assessment of your shipment by the local authorities. If the estimate is lower than the final charge you will be required to pay the difference, and if it is higher, we will refund the difference.

If the amount of your invoice is different to the amount you pre-paid, please get in touch with FedEx Customer Service.

I believe the shipper paid for all charges relating to this shipment so why have I been charged?

The shipper states who will pay the duties, taxes and other charges using the appropriate Incoterms – they state this on the air waybill and commercial invoice. FedEx follows this instruction and may have charged you if it was indicated that the receiver pays the duties, taxes and other charges.  

If you believe that the shipper should pay these charges, you will need to discuss this with them. The shipper must ensure their instructions are correct and clearly indicated on the paperwork for future shipments.

Are duties and taxes applicable as I am a temporary visitor in a country?

Yes, you will still need to pay duties and taxes when importing goods – however, you may be entitled to claim the charges back when you leave, depending on the country and your circumstances.

Please contact  Customer Service for more information on claiming duties and taxes back.

Are duties and taxies applicable if I purchase my goods online?

If duties and taxes are applicable at the time of import, they will be charged regardless of how the goods were purchased.

When buying online, you need to be aware of the sale terms and conditions of the seller, and the prices advertised on websites often do not include duty or tax. This can make products appear cheaper when compared to the country prices so be aware and watch out for any freight, duties, taxes and other added charges at the time of import on top of the item price.

Are duties and taxes applicable if the shipment is a gift? 

Some countries permit gifts to be imported free of duties and taxes, however, they often have strict criteria which must be followed including:

• The sender must be a private individual and the recipient must accept the delivery at a private address 
• The gift must be sent free of charge and of an ‘occasional nature’ 
• The word ‘gift’ must be marked on the air waybill and commercial invoice along with the actual detailed description of what the gift is 
• All goods must be itemized with their own full description and value (note that the value of the gift may not exceed a certain amount and that the amount is limited/set per country)

Not all countries permit gifts, so you should check your destination country rules and regulations.

Please note that items containing alcohol and tobacco will incur excise duty. Items containing food or other controlled items may need additional documentation and be subject to further checks, potentially resulting in additional charges.

If I’m shipping samples, do I need to pay duties and taxes?

Samples can often be imported into a country without duty or tax charges, as long as they meet specific conditions, including:

• The goods may only be used as samples (e.g. a single glove or scored clothing) 
• They’re of low value
• They’re intended to be examined with the intention of placing an order to purchase the goods for commercial purposes

The item must be clearly indicated as a sample on the commercial invoice and any other paperwork provided with the shipment. This will enable FedEx to identify this to the authorities and claim relief of duties and taxes.

Do I need to pay duties and taxes if the goods are second hand?

You may still have to pay duties and taxes on second-hand goods – however, if the goods are classified as antiques or original pieces of art, you could benefit from reduced VAT depending on the national regulations and if your goods meet the correct criteria.  

A statement confirming the type of artwork and date it was created is often needed on the invoice or additional paperwork. Check the customs website of the country you’re shipping to see if your goods meet the criteria. 

I no longer want the shipment so what happens to duties and taxes?

If you no longer want a shipment, it will be considered a rejected import, your shipment must comply with strict rules, for example:

• Goods are defective, or damaged before clearing customs.
• They do not comply with the supplier's terms and conditions of contract.
• Claims must be made before the goods are returned or destroyed.
• Claims must be made within 12 months of the original entry to the authorities.

You will need to pay any duties and taxes to FedEx, and process a claim directly with the authorities to reject your shipment.

Where can I find more information?

More information about Duties and Taxes
Visit the Website of the German Customs homepage

Consumer advice about products sold by companies outside of Germany
For information regarding movement of goods please visit the homepage of German Customs

I have a general invoice or account enquiry
Contact us using the contact form

How can I avoid delays at customs clearance and clearance administration charge for high-value shipments?
Having your own deferment account ensures your high-value shipments are cleared quickly, helping you to work more efficiently while saving time and money.

How and where can I request an own deferment account
You can apply for your own deferment account online at www.zoll.de and download the required forms as PDFs. You can then forward the completed forms to your local main customs office (Hauptzollamt).
Of course you can also request all documents directly from your local main customs office.

What are the benefits from an own deferment account?
An own deferment account means that no further credit checks, particularly those for high-value shipments, are required. With your own deferment account

• your goods can be cleared and delivered more quickly
• the applicable costs are always invoiced on the 16th of the following month
• this means that you receive an interest-free payment deferment of up to 45 days
• advancement fees are no longer charged.
• there is only one accounting procedure per month, no matter how many import shipments you have.