Get to know about the duties & taxes exemption and how customs authorities collect duties and taxes on goods.
A customs duty is a tariff or tax levied on goods when transported across international borders. Customs duties are imposed in order to protect a country’s import and export revenues by controlling the flow of goods into and out of the country.
While revenue is the primary consideration, customs duties may also be levied to protect a domestic industry from foreign competition.
Malaysia uses the CIF valuation method (Cost, Insurance and Freight), which means that the import duty and taxes payable are calculated from the total shipping value of the item including the cost of freight and insurance during shipping, not just the product itself. Some duties are also calculated based on their weight or volume.
Exemption from the Sales Tax under clause 99, Table B Sales Tax Order (Exemption) 1980, is a facility provided for the benefit of local factory operators that manufactures goods that are exempted from the Sales Tax which are meant for export and also on control items under the Ration Control Act 1961 which is bound under the price control to get taxed raw materials (including packaging material) excluding the sales tax.
Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the rate of duty is ad valorem (Charge levied as a percentage of value of the item it is imposed on, and not on the item’s quantity, size, weight, or other such factor).
Exemptions from payment of duties and taxes can be referred to the Customs Duties (Exemption) Order 2017 and Sales Tax (Person Exempted from Payment of Tax) Order 2018. These Orders covers all types of exemption and is updated regularly by Customs.
Customs value is essential to determine the duty to be paid on an imported good.
Undervaluation of goods is taken very seriously by the Customs and can results in a fine or most likely the shipment can be seized.
Cost, insurance and freight (CIF) means that the seller delivers the goods to the buyer on board the vessel or procures the goods already so delivered. The risk of loss or damage to the goods transfers when the goods are on board the vessel, such that the seller is taken to have performed its obligation to deliver the goods whether or not the goods actually arrive at their destination in sound condition, in the stated quantity or, indeed, at all.
The import duty and taxed payable are calculated on the complete shipping value, which includes the cost of the imported goods, the cost of freight and the cost of insurance. In addition to duty, imports are also subject to Sales Tax and some products are to excise duty as well.
Free On Board (FOB) means that the seller delivers the goods to the buyer on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods transfers when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.
The payment of duties and taxes are typically the responsibility of the receiver.
The duty threshold is the amount at which a person begins paying taxes based on the declared value of an item. For shipments entering through designated international airports, duty/tax is not applied to goods below a FOB value of MYR 500.
Duties and taxes are levied by Customs in the destination country and the receiver is responsible for paying them.
Yes, but you need a DHL account to pay duties and taxes for the receiver.
If you want more information on DHL Account, do not hesitate to contact our Customer Service on DHL Express Facebook page today!
Yes, whether a shipment is a gift or not, it must still go through an import procedure as determined by custom’s law in the destination country. The shipment is cleared through customs based on the origin country, the value and quantity, but not its purpose. You will need to pay customs duty and taxes only if the value of the gift is above a stated local threshold.
Duties and taxes are most typically not included in the price of the goods you purchase online. When purchasing goods online, some or all of these goods may not originate in the country you reside in. When goods are not shipped domestically (within your country) or within a single customs union, such as the European Union, you are liable to pay any inbound duties and taxes which your local customs authority deems appropriate.
To ensure the DHL courier can deliver your goods in shortest possible transit time, when we enter your country, DHL pays the customs authority immediately on your behalf for any duties and taxes that are due on the goods. DHL only releases the goods to you upon the full repayment of any duties and taxes that were paid on your behalf.
For shipments cleared by DHL Express Malaysia, we will be paying the duties and taxes incurred on behalf of the importer. A Duty Invoice will be issued to the importer.
If the amount of duties and tax is above RM25, there is a disbursement fee (3% of duties and tax or RM50 whichever is higher) charged by DHL for paying an upfront on the duties and tax incurred for the clearance of the shipment.
There are 3 ways to do payment for custom duties and taxes:
A. Online banking
You may click on the link below, key in your waybill number and proceed with the arrangement. https://delivery.dhl.com/waybill.xhtml?ctrycode=MY
Payment should reflect immediately.
B. Online transfer
DHL Standard Chartered Account Name: DHL Express (Malaysia) Sdn Bhd Account Number: 794156111983 – Once payment is done, please send an e-mail to firstname.lastname@example.org for verification.
Payment will take within 2-3 working days to be processed.
C. Cash on delivery
For B2B shipments, if the duties and tax incurred exceeds RM1000, DHL Express will attempt to contact the importer prior to customs clearance. If the duties and tax incurred is below RM1000, we will proceed with customs clearance to expedite the delivery of your shipment.
For B2C shipments, if the duties and tax incurred exceeds RM500, DHL Express will attempt to contact the importer prior to customs clearance. If the duties and tax incurred is below RM500, we will proceed with customs clearance to expedite the delivery of your shipment.
Any disputes regarding the clearance will be reviewed on a case by case basis by DHL Express.
If a customer requires DHL Express to contact customer regardless of duty and tax amount, a Duty Confirmation Fee of RM53 will be charged per shipment.
Customs valuation is a customs procedure applied to determine the customs value of imported goods. Customs Value is determined using the Customs Valuation where transaction value (TV) is used. Transaction Value is to be based on the actual price of the goods to be valued, which is generally shown on the invoice. Malaysia uses CIF term to determine the Customs Value. Therefore the invoice value stated may have additional costs. The Customs Value is then used to determine the duties and tax calculation.
CIF VALUE = Total of Below [C+I+F]
C = Cost/Value in Invoice
I = Insurance
F = Freight as per IATA TACT Rate
IMPORT DUTY = CIF VALUE * IMPORT DUTY RATES
EXCISE DUTY = [CIF VALUE + IMPORT DUTY]*EXCISE DUTY RATES
SALES TAX = [CIF VALUE+IMPORT DUTY+EXCISE DUTY]*SALES TAX RATES
Yes, duties and taxes do not apply for parcels traveling within the European Union.
Yes, shipments to Langkawi require a K3 form and it is an individual K3.
All imported goods, both dutiable or not, must be declared in the prescribed forms and be submitted to the customs station at the place of import.
A K2 form is used for the customs declaration of export while the K8 form is an application/permit to tranship or remove goods.
In Layman's term, A K2 form is a declaration of export for dutiable and non-dutiable goods whereas a K8 form is a declaration of duty for not paid goods.
Yes, DHL Express Malaysia can prepare customs declaration for our customers.
DHL Express Malaysia can clear shipments if the duties amount falls within the duties blanket amount without having to query to customer for duty confirmation. Customer Query (CQ) agent does not need to send to customer for duty confirmation and this can speed up custom clearance by avoiding customers having to respond to DHL Express for duty confirmation.
The blanket approval for DHL Express to proceed clearance of a shipment without seeking customer’s confirmation is RM500. However, customers may propose a higher threshold specific for their account. This can be informed through the Commercial and Gateway Clearance Team with a written email proposal from the customer. A list of such customer has to be maintained by the Gateway Clearance Team.
There is no specific maximum threshold set, however a threshold which exceeds RM7000 has to be reviewed by DHL Express Malaysia's Finance Team before proceeding.
Any shipment that requires to goes through re-declaration will need to seek Custom’s approval before going through the process. Customers need to provide an appeal letter to the assigned person in DHL Express in order to show to the Customs to get the confirmation. The reasons why shipments need to go through re-declaration are as follows:
Yes, importation of shipments may incur duties or taxes or both.
|SALES TAX (SST)||
Yes, for non-controlled and non-restricted items with a Cost, Insurance and Freight (CIF) value of below RM500, no duties and taxes will be imposed. This is referred to as a De Minimis Value.
Personal Goods Exempted from Payment of Duties/Taxes (Pursuant to Item 19 of the Customs (Exemption) Order 1988). The items below are exempted from payment of duty/tax subject to the following limits and conditions:
Yes, for goods that exceed the limit set out in question 10 will be subjected to duty/tax are as follows:
No, exportation of shipments does not attract duties or taxes or both. However, there is CESS payment chargeable for Rubber Products.