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

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

Importing goods from the UK to the Philippines involves various components that need to be considered to estimate duties and taxes accurately. It's not just about moving the goods from point A to point B. The true origin of the goods, the Harmonized System (HS) Code, the Customs Value, and the Applicable Tariff Rate are key variables you need to be familiar with.

Let's take a step back and start from the beginning. The very first thing you need to do is identify the country where the goods were actually manufactured or produced. This is known as the country of origin and is a fundamental factor in determining the import duties. Brace yourself, we're going to dive deeper into these factors and make this complex process a little bit simpler and more understandable.

Step 1 - Identify the Country of Origin

Identifying the Country of Origin is crucial for five key reasons:

1. Determining Duties: Products originating in different countries can carry varied duty rates. For example, a leather jacket manufactured in Italy might attract a different tax than one made in China.
2. Trade Agreements: The UK and the Philippines have specific bilateral trade agreements that influence duty rates. One notable agreement is the Generalized Scheme of Preferences (GSP) under which certain products enjoy lower or even zero duty rates.
3. Authenticity and Standards: Documenting the origin country helps ensure the imported goods meet the Philippines' health, safety, and quality standards.
4. Compliance: Customs authorities require this information to enforce international trade laws.
5. Anti-Dumping Measures: The Philippines may place additional duties on products, such as steel and footwear, that it deems are sold at an unfairly low price.

Take a close look at your goods and ensure they comply with the Philippines' specific import restrictions. For instance, some used clothing items and electronic equipment face strict restrictions. Plan ahead to avoid unnecessary delays or fines. Remember, knowledge goes a long way in ensuring a smooth customs passage.

Step 2 - Find the HS Code of your product

The Harmonized System (HS) code is a standardized numerical method of classifying traded products. Developed by the World Customs Organization, it's used by customs authorities around the world to identify products for the application of duties and taxes. Simply put, it's a universal economic language and code for goods.

Your first point of contact for obtaining the HS Code should ideally be your supplier, as they are typically knowledgeable about importing regulations and the products they're dealing with. They'll likely provide the HS Code for you.

However, in the event you're unable to get the HS Code from your supplier, don't worry. We've got a straightforward process for you. For starters, your best friend will be the Harmonized Tariff Schedule. This online look-up tool makes finding the HS code a breeze.

The first step in using this tool is to search for your product's name in the search bar. It's as simple as that.

Following your search, take a glance at the Heading/Subheading column. That's where you'll identify your product’s HS code.

Take heed: ensuring the accuracy of your HS Code is of utmost importance. Any discrepancy, as minor as it may seem, can result in unnecessary delays in transportation and potential fines. Don't overlook this detail – precision is key!

We understand that this can be a bit complex, so to make things easier, we have created an infographic showing you how to read an HS code. It breaks down the details into visually digestible information.

Step 3 - Calculate the Customs Value

Understanding your customs value might feel like a puzzle, especially when it differs from your product's original price tag. Here's the secret: The customs value isn't just about your goods' worth, but also their journey to the Philippines from the UK!

It's entirely based on the CIF value - Cost, Insurance, and Freight. If your product's price is $1200 and you've spent $300 on shipping and $100 on insurance, your customs value sums up to $1600, not merely the $1200 product cost. This value is crucial in determining your duty fees and taxes, so getting it right is key to avoid any unexpected shipping costs. Be transparent, accurate, and always keep those freight invoices handy!

Step 4 - Figure out the applicable Import Tariff

Import tariffs, simply put, are taxes imposed on imported goods. In the Philippines, as a member of ASEAN, these tariff rates are determined according to the ASEAN Harmonized Tariff Nomenclature (AHTN). For goods shipped from the UK, you can determine the applied tariffs for your product by using the UK's Trade Tariff tool, found on their government website.

Let's assume your product is a simple wooden chair, classified under HS code 940169 (seats of cane, osier, bamboo or similar materials). Here's how to find the applicable tariff:

1. Enter 940169 into the search bar of the UK Trade Tariff tool.
2. Select UK as the country of origin.

Inspect the duties applied to your product. For our example, let's pretend the tool listed a 15% tariff rate. Now, if your total Cost, Insurance and Freight (CIF) value for importing your wooden chairs to the Philippines is $10,000 USD, your import duty would be:

$10,000 (CIF) × 15% (import tariff) = $1,500 USD

This amount will be part of the costs you'll need to cover when importing goods from the UK to the Philippines. Understanding how to calculate these import duties can give you a better idea of the total costs you'll incur, keeping you ahead in your financial planning.

Step 5 - Consider other Import Duties and Taxes

In addition to the standard customs tariff, shipments from the UK to the Philippines may incur other import duties and taxes. These are determined by product characteristics and country of origin specifics. For instance, you might contend with the excise duty, tapped on certain goods such as alcohol and tobacco.

Further, be aware of anti-dumping taxes, imposed if goods are priced substantially lower than the same goods in the home market, to prevent businesses from undercutting on price.

Let's not forget VAT (Value Added Tax). In the Philippines, VAT is generally set at 12%. So, for a hypothetical shipment valued at $1,000 USD, the VAT might be $120 USD ($1,000 12%). Please remember, these are just examples - the actual work is much more complex and the costs you encounter may be different.

Always ensure you consult with a freight forwarder or customs specialist to understand the full costs and considerations before shipping. Understanding these extras will help paint a clearer financial picture and make your shipping processes smoother and more cost-efficient.

Step 6 - Calculate the Customs Duties

In calculating customs duties for your goods shipped from the UK to the Philippines, there are a few key variables to consider.

Firstly, if you only need to pay customs duties, simply multiply the customs value of goods—say, $3000—by the duty rate, which might be 10%. The customs duty would be $300.

However, if the VAT is also applied, first calculate the customs duty, then add it to the customs value. This sum is then multiplied by the VAT rate. So, if VAT is 12%, ($3000 + $300)12% would result in $396 as your VAT.

For goods that are subject to anti-dumping taxes and Excise Duty, first calculate the customs duty and VAT as before, but now add the anti-dumping tax - say, $500. Excise Duty is then calculated based on this cumulative value. If we assume the Excise Duty rate is 15%, the formula becomes ($3000+$300+$396+$500)15%, giving $599.40 as the Excise Duty.

Remember, this can get complicated, but you're not alone in this journey. DocShipper can take care of every step of the customs clearance anywhere in the world. We ensure you never pay more than necessary. If you're unsure or need assistance, contact us for a free quote in less than 24 hours. Let us handle the complexities, so you can focus your energy on your business.

Bill of Lading

Navigating the choppy waters of international shipping? The Bill of Lading (BoL) will be your indispensable guide on the journey from the UK to the Philippines. This legally binding document represents the handover of goods between the shipper and carrier and is your ticket to securing release of your cargo. Transitioning to an electronic release, or 'telex', can bring major benefits. It's speedy, cuts down on paperwork, and means your cargo can be released at the destination without the need for the original document. For those soaring through the skies with air cargo, the Air Waybill (AWB) is your equivalent of the BoL. Lastly, don't overlook the plethora of practical insights that your BoL offers - from an inventory of shipped items to proof of consignment. It's much more than just a receipt - it's an essential tool for your shipping journey.

Packing List

When shipping goods from the UK to the Philippines, crafting an accurate Packing List is a responsibility you can't afford to miss. It's the compass that guides customs officers through your shipment - whether that's a batch of designer clothes heading by air for a Manila boutique, or a container ship full of auto parts docked at Subic Bay. Goods aren't cleared through sea or air without it - period! This document details your shipment's contents, weight, and dimensions, confirming what's inside matches with what's declared. So, dot those i's and cross those t's meticulously. Your Packing List can smoothen your goods' passage and circumvent potential delays in customs. Accuracy here serves as a trustworthy business card that opens international doors. Remember, every detail counts!

Commercial Invoice

The Commercial Invoice is a crucial document when shipping goods from UK to Philippines. It's not merely a list, but a declaration of your shipment's essentials, like the shipper and receiver details, description of the goods, the Harmonised System (HS) codes, and the shipment's value. Keep your Invoice aligned with other shipping documents, such as the packing list, to ensure smooth customs clearance. Misalignment or missing information can delay your shipment and incur extra costs.

For example, iff your shipment includes electronic gadgets, your HS code must conform to the specific category they belong in, not general electronics. Any discrepancy can cause hiccups at customs. For simplified clearance, anticipate these challenges by double checking this essential document. Remember, when your paperwork is ship-shape, your freight journey will be too.

Certificate of Origin

When shipping your goods from the UK to the Philippines, a key document that eases your journey through customs is the Certificate of Origin. This certificate verifies the country your goods were manufactured in and can unlock preferential customs duty rates. For instance, if you're shipping UK-made textiles, your Certificate of Origin can validate your claim to avail of the Generalized Scheme of Preferences, potentially saving on import duties at the Philippine end. So, make sure your document precisely affirms your product's origin country. This seemingly simple step can become a tangible asset, fast-tracking customs clearance and strategically lowering your costs.

Certificate of Conformity (CE standard)

Your shipments from UK to Philippines may often require a Certificate of Conformity, especially if they are designed to European standards (CE). This is not a quality assurance certificate, but a declaration that your products adhere to EU safety, health, and environmental protection laws. Think of it like your product's passport for the European market. The US has a similar feature, known as the FCC Declaration of Conformity. However, since the Brexit transition, the UK has implemented the UKCA marking for most goods. In essence, a Certificate of Conformity tells customs, This product is legal here. Precise record-keeping is essential to avoid delays or denial at the border. One important tip: ensure a thorough check on your goods compliance to UKCA, not CE, before shipping to or from the UK.