Freight shipping between the UK and Indonesia: Rates -Transit time – Duties & taxes

How to calculate duties & taxes when importing from UK to Indonesia?

Unraveling the mysteries of customs duties and taxes when importing goods from the UK to Indonesia can appear challenging, but with the right knowledge it becomes a straightforward process. To start with, you'll need to have some key pieces of information readily available: the country where the goods were originally manufactured or produced, the Harmonized System (HS) code of the goods, the Customs Value, and the Applicable Tariff Rate. Knowing and understanding these elements will provide you the foundation to estimate the duties and taxes effectively.

Then, equip yourself with the type and origin of the goods, as this critical first step will influence the determination of customs duties. Being clued up about where your goods were manufactured or produced forms a crucial part of your customs and tax estimation journey. Armed with this knowledge, you can look forward to less guesswork and a smoother, fuss-free import experience.

Step 1 - Identify the Country of Origin

Getting the goods from the UK to Indonesia starts with defining the country of origin. This fundamental step, seemingly apparent, carves out five crucial paths in the freight forwarding journey.

First, it offers a genuine snapshot of trade agreements. By identifying the UK as your country of origin, you're unlocking an array of advantages under the Indonesia-UK trade agreements. These can mean significant customs duty savings.

Second, it leads you to the refreshed import restrictions of Indonesia. Products originating from certain countries may face stricter regulations. Some British goods might have specific restrictions, better to know them up front.

Third, it allows pin-point loud and clear HS codes for your products. Choosing the wrong code can lead to unnecessary costs, or worse, legal troubles.

Fourth, it refines the customs duty calculates. With a firm grip on the place of origin, you're one step closer to the most accurate estimations.

Lastly, it shows your compliance with cargo regulations. Clear statement of the country of origin is mandatory and non-negotiable.

Now that you know the essence of identifying the country of origin, immerse yourself in the beneficial trade agreements between the UK and Indonesia and navigate through any possible import restrictions. Knowledge is yours, making that import process smooth and cost-effective.

Step 2 - Find the HS Code of your product

The Harmonized System (HS) code is a standardized numerical method of classifying traded products, which is used by Customs authorities all over the globe to determine the duties and taxes payable. As a business looking to export or import goods, it's absolutely crucial for you to correctly identify this code.

You might find it helpful to begin by asking your supplier for the HS code. This is usually the most straightforward method, as suppliers are generally well-acquainted with their products and the relating customs requirements.

If contacting your supplier isn't possible, don't worry. There's an effective method to find the HS code on your own. All you need to follow is this easy, step-by-step process:

1. Open the Harmonized Tariff Schedule.
2. Type your product's name into the search bar.
3. Look for the HS code in the Heading/Subheading column.

Note: It's vastly important to ensure absolute accuracy when choosing your HS Code. Wrong codes can lead to unpleasant complications such as unnecessary delays in shipment and even potential financial penalties.

Here's an infographic showing you how to read an HS code. By following these guidelines, you'll be well-prepared to navigate the complex world of global shipping, ensuring your goods reach their intended destination without any hitches.

Step 3 - Calculate the Customs Value

Understanding the customs value can be a bit challenging if you're shipping goods from the UK to Indonesia. Essentially, this is not merely the price you paid for your goods. Rather, the customs value in Indonesia is based on the CIF (Cost, Insurance & Freight) method. This means you have to add together the cost of the goods, the shipping cost, and the insurance cost.

Suppose you purchase goods worth $2000 and pay $500 for shipping and $50 for insurance. The customs value will be $2550 (2000+500+50). Remember, this value holds regardless of any discounts or deals you got on the products. This is crucial, as Indonesian customs calculate duties and taxes based on this CIF value, not just your product's price. So, keep your calculations in check to prevent any unpleasant surprises!

Step 4 - Figure out the applicable Import Tariff

Import tariffs are essentially the taxes charged on imported goods. These are typically calculated as a percentage of the value of the items being imported, and the percentage varies depending on the product's classification under the Harmonized System (HS) code. Indonesia employs a Harmonized System for their tariff codes, similar to many other countries.

To identify the tariff for items you're importing from the UK to Indonesia, you would refer to the UK Government’s Trade Tariff tool .

Let's take, for example, a shipment of porcelain dishware (HS code: 6911). Here's how to find the applicable import tariff:

1. Enter '6911' into the tariff code search box.
2. Select 'Indonesia' as the destination.

The tool will provide the tariff rate. Suppose it said the rate was 15%.

Now, assume the cost of your porcelain goods is $10,000, and your insurance and freight (CIF) costs amount to $2,000, making the CIF value $12,000. Your import duties will then be 15% of the CIF value.

Using this formula: CIF value x Tariff rate = Import duty

It follows: $12,000 x 15% = $1,800

Therefore, $1,800 would be what you'd pay in import duties for this example. Follow this process to find the import tariff for your specific situation. This step is crucial for accurately predicting the landed costs of your shipment to Indonesia.

Step 5 - Consider other Import Duties and Taxes

As you advance in your import process, it's crucial to understand that apart from the basic tariffs, there might be additional costs depending on the product and its origin. Here are a few important ones explained with theoretical examples:

1. Excise Duty: Certain goods like alcohol or tobacco are usually subject to precise taxation. Say, a consignment of whiskey might be levied an Excise Duty of 150%.

2. Anti-dumping Taxes: These apply to products priced below the fair market value. If you're importing steel at $500 per metric ton while the average rate is $700, an anti-dumping tax could apply.

3. Value Added Tax (VAT): This is likely the most notable one. For goods coming into Indonesia from the UK, VAT is typically charged. For example, if you're importing clothing worth $20,000, a VAT of 10% means you pay an additional $2,000.

Remember, these rates are illustrative and actual calculations may vary. Look at these extra costs not as obstacles but as necessary steps to smoothly delivering your products. By understanding and preparing for these, you'll be on your way to successful business operations between UK and Indonesia.

Step 6 - Calculate the Customs Duties

In Step 6 - Calculate the Customs Duties, understanding how to determine costs when importing goods from the UK to Indonesia is key. This process involves summing up the customs value, applicable taxes, and associated duties. Here are three scenarios to paint a more precise picture.

Example 1: If you're importing a product valued at $20,000 and the customs duties are 10%, your total customs duties would be $2,000. No VAT is included in this instance.

Example 2: On a product valued at $15,000 with customs duties at 10% and VAT at 10%, you’ll pay $1,500 in customs duties plus $1,650 in VAT, totalling $3,150 in charges.

Example 3: For a product valued at $25,000 with customs duties at 10%, VAT at 10%, anti-dumping tax at 5%, and excise duty at 5%. Your total customs dues would be $2,500 plus $2,750 in VAT, $1,375 in anti-dumping tax, and $1,375 in excise duty for a total of $8,000.

Managing all these calculations can be complex. That's why DocShipper offers comprehensive customs clearance services - ensuring you’re never overcharged. We can handle your customs requirements, even within 24 hours. For a no-obligation quote, get in touch with us.

Bill of Lading

Navigating UK-Indonesia shipping? Then the Bill of Lading is your lifeline, marking ownership transfer of your goods. Think of it as a baton passed from the shipper to the carrier, then to the consignee during relay. But wait, there's more! An electronic, or telex, release allows for swift processing and eliminates the risk of a lost or delayed hard copy. This speedy transition happens all within a secure digital environment. Dealing with air cargo? The Air Waybill (AWB) bobs to the rescue. Comparable to the maritime Bill of Lading, the AWB ensures your airfreight lands in the right hands at lightspeed. So, always double-check these documents; keeping them tip-top speeds your shipment and jets you past customs without a hitch. Remember, a solid paper trail isn't just about compliance—it's your golden ticket to global trade.

Packing List

You might think filling out the Packing List is just another item on your logistics to-do list—but it's crucial for seamless shipping from the UK to Indonesia. Whether you're sending exquisite British ceramics via sea freight or rushing an air freight of latest tech components, an accurate Packing List is your ace. Think of it as your consignment's autobiography—it lists items, quantities, weight, and other key details. Customs authorities in Indonesia rely heavily on this list to validate the contents of your shipment, similar to how you'd check a warming oven against the recipe you're making. A wrongly declared weight could mean a considerable delay—imagine misjudging the weight while baking a sponge cake! So, strive for accuracy in your Packing List—it paves the way for a smoother customs clearance and keeps your business running like a well-oiled machine.

Commercial Invoice

Your Commercial Invoice is like a passport for your goods. It’s critical when you’re shipping from the UK to Indonesia and vice versa. It must accurately detail the shipped goods, their full value, and the terms of the trade. A mismatch between the Commercial Invoice and other documents can halt customs clearance, leading to delays and unnecessary costs. Suppose you're exporting 'luxury wooden furniture.' Make sure details like 'Bespoke Mahogany Dining Table' match across documents, not a vague 'wooden product.' Reducing discrepancies streamlines customs procedures, helping your shipment to glide through borders. So, always double-check, and remember, precision is paramount! Get personalized assistance for all your shipping documents from dedicated experts at our Support Centres across both countries.

Certificate of Origin

When shipping goods from the UK to Indonesia, securing a Certificate of Origin (CoO) is critical. Why? It's your product's passport, stating its nationality and ensuring its smooth passage across borders. Remember, without the CoO mentioning the country of manufacture, your shipment might hit a customs snag. But, with it, you might even score potential benefits like preferential duty rates. Picture saving a hefty sum on a bulk shipment of tea from Leicester to Jakarta, all thanks to that properly filled out CoO. It's an integral part of your shipping adventure, proving that your goods were indeed made where you claim they were. Don't overlook its importance, and make sure it’s part of your shipping checklist!