Almost all shipments crossing international borders are subject to duty and tax assessment by the importing country's government. Customs officials assess duties and taxes based on information provided on the shipping label, the Commercial Invoice, and other relevant documents.
Customs Clearance Services are included in your price of shipping with FedEx international services, but fees charged by your government are not. If FedEx is required to advance monies on your behalf to your government to clear the shipment through Customs, you will need to reimburse FedEx for the monies they advanced and a fee they charge for that advancement.
How Duties and Taxes Impact Your Shipment
In some countries, duties and taxes must be paid before the shipments are released from customs. A shipment's duty and tax amount is based on the following:
- Product value
- Trade agreements
- Country of manufacture
- Description and end use of the product
- The product's Harmonized System (HS) code
- Country-specific regulations
Goods and Services Tax (GST) and Value-Added Tax (VAT)
Many countries have a general consumption tax which is assessed on the value added to goods and services. In some countries such as Canada, Singapore, Australia and New Zealand, this tax is known as the goods and services tax or GST. For European Union (EU) countries, this tax is known as a Value-Added tax (VAT). Businesses that are VAT-registered and fully taxable do not bear the final costs of VAT because it is a tax on consumer expenditure. To see EU-specific VAT rates, please visit the European Commission (EC) Taxation and Customs Union website.