Understanding Customs Duties and Taxes for International Shipping

Understanding Customs Duties & Taxes

Understanding Customs Duties & Taxes

What Are Customs Duties and Taxes?

When you send items across countries, the government of the destination country may charge certain fees before the goods can be released to the receiver. These fees are called customs duties and taxes.

Customs duties and taxes are a way for countries to regulate trade and collect revenue on imported goods. The fees are based on the type, value, and purpose of the items you’re sending.

Some items may not be charged duties. These include:

  • Sample items sent for business evaluation

  • Gifts sent to friends or family

  • Items being sent for repair and will be returned

  • Items with value below the country’s dutiable threshold

  • Certain documents

  • Items intended for children, like toys or clothes

The word “dutiable” simply means an item that is subject to customs duty — in other words, it is an item the government may charge a fee on when it crosses the border. This simply means it may or may not attract duties.

⚠️ Disclaimer: Customs rules vary by country and item. The best way to know if duties apply is to check with the authorities in the destination country. Always declare your items correctly to avoid unnecessary delays or wrong charges.


The Difference Between Duties and Taxes

  • Duties: A charge based on the type of goods and their declared value. For example, electronics, clothing, and perfumes may have specific duty rates.

  • Taxes: Additional government charges, like Value Added Tax (VAT) or Goods and Services Tax (GST), depending on local laws.

Together, duties and taxes are often called the “landed cost”, which is the total cost of getting your item into the country.


How Customs Determines the Amount

Customs uses three main factors to calculate duties and taxes:

  1. Declared value of goods (from your invoice)

  2. Type of goods (identified using a Harmonized System Code, or HS Code)

  3. Country of origin (where the shipment is coming from)

Once these are known, customs calculates the applicable duty and tax before releasing your shipment.


Can I Know How Much to Pay Before Shipping?

Yes! You don’t have to guess. Routely provides a free Customs Duty & Tax Calculator on our platform to help you estimate charges before shipping. It will show you:

  • Estimated total cost to the destination

  • Breakdown of duty, VAT, and other charges

  • Helps you avoid surprises during customs clearance

Visit our website to use the FREE Customs Duty Estimator

NB: 
This Customs Duty Estimator gives an estimated cost only. The final duties and taxes charged on your shipment may differ, depending on the destination country’s customs rules.


Who Should Pay for Customs Duties?

The short answer is, the person receiving the package (the buyer) is the one who pays customs duties. This is because the fees are charged by the destination country’s government on imported goods, and the receiver is considered the “owner” of the shipment once it arrives.

However, customs duties can be paid by anyone, depending on the agreement between the sender and the receiver. For example:

  • The sender (person or business sending the package) may choose to pay the duties on behalf of the receiver.

It all depends on the arrangement between the buyer (receiver) and seller (sender)


Why You Should Declare Items Correctly

If you declare the wrong value or describe your item incorrectly:

  • Customs can revalue, delay, or seize your shipment

  • You may face fines or penalties

  • It can affect your future ability to ship internationally

Always declare your items honestly. A small mistake can cost time, money, and your shipping credibility.


Example

If you send a ₦100,000 pair of shoes to the UK:

  • UK customs may charge 8% import duty = ₦8,000

  • Plus 20% VAT on total = ₦21,600

  • Total payable ≈ ₦29,600 before delivery


Important Notes for Routely Users

  • For Cargo Shipments, customs duties are already prepaid. Once you book a cargo shipment on Routely, the amount you pay includes duties and taxes.

  • For Express Shipments, duties may apply depending on the country and item. You will need to pay customs duties if applicable, based on the country’s rules.