Import tax

What is import tax (or customs duty)?

Import tax (or customs duty) is a tax collected by customs authorities on goods that cross international borders. The main purpose is to generate income for local governments, but it also raises the final price of foreign goods for consumers.   

Think of import taxes as an umbrella term that includes all charges applied to imports. They include  import duties and tariffs defined , but also other taxes like VAT or sales tax. 

How much is import tax? 

The import tax and duties you’ll need to pay for a shipment are determined by several factors, including: 
 

• The value of the goods (including insurance and shipping fees) 
   
• The goods description 
   
• The country or region of origin 
   
• The destination country’s tariff rates 
   
• Customs clearance channels

​​​Many countries have a minimum threshold of order value that goods have to meet before taxes and duties apply – this is called a ‘de ​​minimis’ level.​​ ​In other words, if the value of the order is below this threshold, it can enter the country without the buyer having to pay additional fees like import taxes or customs duties, but if the order exceeds this amount, those extra charges kick in​ .

Countries with the highest and lowest de minimis thresholds

The de minimis threshold varies significantly from country to country, affecting both the overall cost and the convenience of shipping. 

Highest de minimis thresholds 

• ​​United States: The U.S. has one of the highest de minimis thresholds in the world at USD $800. This high threshold facilitates trade by allowing goods valued at USD $800 or less to enter the country without incurring duties or taxes, which significantly benefits both businesses and consumers by reducing costs and simplifying the import process. 
   
• Australia: Australia also has a high de minimis threshold set at AUD 1,000. This means that shipments under this value are exempt from duties and taxes, promoting international trade and making it easier for businesses to ship goods to Australia without additional costs​. 

Lowest de minimis thresholds 
Some countries have a zero de minimis threshold, meaning all imported goods are subject to duties and taxes regardless of their value. Countries with a zero de minimis threshold include Egypt, Nigeria, and Sri Lanka, among others.