Freight Shipping between UK and Bahrain | Rates – Transit times – Duties and Taxes

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

Venturing into the realm of duties and taxes might seem like solving a complex equation, but it doesn't have to be. Mastering this calculation involves understanding the components involved, namely the country of origin, the HS code (Harmonized System code), the customs value of your goods, the applicable tariff rate, and any other applicable taxes or fees.

Now, where does our journey into customs calculation start? It begins with the identification of the country where the goods were manufactured or produced - the country of origin. This is the kickoff point, as the origin largely influences the customs tariff rates that Bahrain, your destination, will apply to your import. To crack this part of the equation, don’t just think about where your item was shipped from, but rather where it was actually made.

Step 1 - Identify the Country of Origin

Knowing your product's Country of Origin - here the United Kingdom - is a key first step before delving into the Harmonized System (HS) code, and here's why.

Firstly, it determines eligibility for trade agreements. UK-Bahrain trade relations fall under the GCC-UK Free Trade Agreement, which can lower or eliminate customs duties. Secondly, it affects tariff classifications. Bahrain Customs may levy different duties on similar products from different origins. Thirdly, clear origin identification minimises potential customs disputes. Fourthly, certain products from specific nations might face import restrictions. Lastly, it's integral for compliance, as incorrect origin declaration can result in penalties.

UK exports face few restrictions entering Bahrain, but stuff like pork products and alcohol are barred due to cultural considerations. To navigate these rules flawlessly, we recommend clearly labelling all your items and conducting thorough research before shipping. This step might seem obvious, but it's the bedrock of your importing journey.

Step 2 - Find the HS Code of your product

The Harmonized System (HS) Code is a standardized number used across the globe to classify traded products. Developed by the World Customs Organization, it's primarily used in import and export processes, helping to identify the nature of goods, calculate duties and taxes, and fulfill customs declaration procedures.

If you're wondering where to find this vital information, your supplier is typically the best starting point. They are often well-versed in these codes because they're so closely involved in the import-export operations and understand the specific regulations associated with their product.

However, if getting the HS Code from your supplier isn't an option, fear not! You can follow these easy steps:

1. Visit this Harmonized Tariff Schedule tool.
2. Use the tool's search bar to enter your product's name.
3. Check the ‘Heading/Subheading’ column in the returned table. The HS Code for your product will be listed there.

As you embark on this process, take special note: accuracy is of the utmost importance. Using an incorrect HS Code has repercussions, potentially causing delays in the shipment or even worse, attracting fines. So ensure you take your time in searching and selecting the right HS Code.

Here's an infographic showing you how to read an HS code.

Step 3 - Calculate the Customs Value

Understanding the customs value of your shipped goods is an essential part of your import process. It's not simply the price you paid for your goods, but actually comprises the complete cost experienced at a 'CIF' basis - Cost, Insurance, and Freight. Say you bought goods worth $5000 from the UK, paid $700 for shipping, and an additional $300 for insurance. Your customs value isn't the $5000, but rather $6000, the total CIF value. So, when you're dealing with customs clearance in Bahrain, remember to factor in these additional costs to avoid any unexpected financial surprises.

Step 4 - Figure out the applicable Import Tariff

Import tariffs are a type of tax imposed by a country on goods imported from abroad. They're designed to add a cost to imported goods to make them less competitive against domestic products. Bahrain, being a member of the Gulf Cooperation Council (GCC), follows the GCC Unified Customs Law, which sets standard import duty at 5% with some exceptions.

To determine the tariff for your goods shipped from the UK, you can utilize the UK's own tariff identification tool found here: UK Trade Tariff.

Here's a simple step-by-step process:

1. Enter the Harmonized System (HS) code identified earlier and select the country of origin.
2. The tool will display the corresponding duties and taxes applied to this product.

Let's consider, for instance, a product with HS code 6105 (men's shirts, knit or crochet). The tool shows us that the tariff rate is 12%. If your goods have a Cost, Insurance, and Freight (CIF) value of $10,000, then your import duty would be:

Import Duty = CIF Value ($10,000) x Tariff Rate (12%) = $1,200

Understanding these tariffs and how to calculate them is crucial. They add to your shipping costs and pricing strategies, ultimately shaping your profits and competitiveness in the Bahrain market.

Step 5 - Consider other Import Duties and Taxes

Beyond the standard tariff, your goods may be subject to additional import duties based on their origin and nature. For instance, items could attract an excise duty–applied on specific goods like alcohol or tobacco, or anti-dumping taxes–imposed on cheap imports that could unfairly disrupt local markets.

Let's take a hypothetical scenario: you might be importing machinery worth $100,000. If an excise duty of 10% applies, you'll need to budget an extra $10,000. Remember, this is merely an example to illustrate the potential impact of these duties and real rates may vary.

Without a doubt, the key charge to bear in mind is the Value Added Tax (VAT). In Bahrain, the standard VAT rate is 5 %. So, if the cost, insurance, and freight (CIF) value of your goods is $200,000, you should anticipate to pay an additional $10,000 as VAT. Be aware that exceptions may apply, and rates might change, so always seek the most updated information.

Tackling these extra costs may appear challenging, but with careful planning and budgeting, it's entirely feasible. Always be prepared, stay informed, and above all, seek expert advice to navigate the complexities of international trade.

Step 6 - Calculate the Customs Duties

Customs duties in Bahrain for UK imports depend on three factors: customs value, VAT, and anti-dumping taxes. To calculate customs duties, first establish the customs value (value of goods + insurance + freight). Then, apply a 5% duty to this value. If VAT applies (also 5%), apply it to the sum of the customs value and duty. If an anti-dumping tax is applicable, it must be included, as well as any Excise Duty, which varies per product type.

For instance, if you're importing goods worth $10,000 with insurance and freight at $2,000, the customs value becomes $12,000. The duty is then $600 ($12,000 5%). Thus, you pay $600 in duties with no VAT.

If VAT applies, add duty to the customs value, bringing it to $12,600. Then calculate 5% VAT on this ($630). Hence, total payable taxes are $1,230.

With an anti-dumping tax (let's say 10%) and 15% Excise Duty, these become $1,200 and $1,890 respectively. This brings your total duties and taxes to $4,320.

We understand this is complex, but don't worry! At DocShipper, we handle every step of the customs clearance process, worldwide. We ensure you aren't charged more than needed. Get your free quote in less than 24h. Avoid the hassle, let us navigate customs for you.

Bill of Lading

Bill of Lading, commonly referred to as B/L, isn't just another shipping document, it's a pivotal tool in the realm of international trade. Here's how it's significant when shipping from the UK to Bahrain: it not only offers proof of ownership transfer, but also constitutes a legally binding contract between exporters and carriers. Looking to streamline this further? Telex release is a ticket you might want to grab. Electronic in nature, it fast-forwards the B/L release process, eschewing the need to wait for those snail-paced physical deliveries. If you're more air cargo oriented, the AWB (Air Waybill) is your go-to! Remember, in the dynamic landscape of freight forwarding, being well-versed with these nuances can give you the upper hand, saving both precious time and hard-earned money. Gear up for a smoother, more efficient shipping experience!

Packing List

Navigating the sea of international freight can feel like a daunting task, especially when handling delicate customs regulations between the UK and Bahrain. One essential tool in your navigation kit is the Packing List. As a shipper, it's your responsibility to provide a meticulous, accurate Packing List. Think of it like a blueprint for your shipment: it details the weight, measurements, and contents of your goods. Knowing how many solar panels or sacks of barley you're shipping and their exact specifications isn't just helpful – it's required for sea and air freight. Just remember when ABC Industries shipped machine parts without a clear Packing List: their shipment was delayed at Manama port, costing time and money. Leave no room for such confusion; precise information keeps your cargo moving and gets it to its Bahrain destination on time. So, double-check that Packing List - it's your ticket to a smooth shipping journey.

Commercial Invoice

The Commercial Invoice, your trade passport when shipping between the UK and Bahrain, carries pivotal details like seller info, buyer info, description and value of goods. Missteps on this document easily derail your shipment at customs. So, cross-check details with your Bill of Lading and Packing List to ensure consistency. For instance, if you're shipping Antique Furniture, not only should the description match across all documents, but proper HS codes should also align. Remember, an under-declared or mis-declared invoice directly impacts the customs duty, incurring penalties. An invaluable tip? Leverage digital tools for creating robust, error-free Invoices, shaping seamless customs encounters. Stay tuned in to regulations, evolving as rapidly as your business needs.