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Who pays for the duties or taxes that may be applicable at the destination country?

Created:   |   Updated:

International shipments are subject to customs duties - taxes imposed on goods when transported across international borders. Customs duties protect each country's economy, residents, jobs, environment, etc., by controlling the flow of goods, especially restrictive and prohibited goods, into and out of the country.

Customs duties are assessed on the declared value of the goods shipped. To avoid excessive taxes, be sure that your customs forms indicate accurate values.

Each carrier provides different options for customs duties payment. We provide details about the following carriers:

FedEx:

FedEx gives you have the option to bill the customs duties to the sender (you) or the recipient (your customer) if they have a valid 5-digit US zip code connected to their account. International accounts cannot be billed. While it's not necessary for the recipient to have an account number, it should be provided if known.

NOTE: Fedex policies state that should the Recipient or Third Party fail to pay duties and taxes, the sender is responsible for payment.

Learn how to choose which party pays for FedEx customs duties.

UPS:

When creating an international UPS shipment, you can select which party pays the customs duties/taxes on the READY TO SHIP page: Recipient, Sender, or Third Party.
Recipient

This is the default and when chosen as the payor of customs duties/taxes, there are optional fields for a UPS account number and the account number’s postal code. If provided, that account will be billed instead of the recipient paying in cash.

Sender

You are responsible for paying customs duties/taxes.

Third Party

When  chosen, then the UPS account number and postal code must be specified, they are not optional for third party payment.

NOTE: When modifying a batch of UPS international shipments, only two options are available for payment of customs duties/taxes: Sender and Recipient.

USPS:

USPS makes the recipient responsible for customs duties and taxes. 

According to the USPS website:

"Post Office facilities must collect a Postal Service fee from the addressee for each item on which customs duty or Internal Revenue tax is collected. The Postal Service fee is authorized by international postal agreements to reimburse the Postal Service for costs it incurs clearing items through customs and collecting customs duties at the time of delivery."

 


Related articles:

How to: Bill postage or customs duties (taxes) to a third party
What is a Customs Form?
How to: Set up International Shipments settings
Overview: Customs Information on the READY TO SHIP page
FAQs: Certificate of Origin

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