AliExpress import tax and customs: What to do.
There are two reasons why we choose to buy products on AliExpress: we can get goodies that we cannot find in our home country, or those above-mentioned goodies are sold at a much lower price.
Let’s say it clear. The Chinese market is convenient for both those who buy in bulk and to end consumers. The first can save up money on production costs, making in this way a considerable profit, while the second can buy anything he wants, even the silliest things!
Buying from AliExpress is very easy, if you think of it, with just a couple of clicks you can order as much merchandise as you want. You just have to pay your products, enter your address and within a few weeks the goods will arrive at our doorstep, just as you ordered them.
But what if we buy small quantities of wholesale products? Could there be problems with AliExpress import tax? What can you do if the package is stopped at the customs?
AliExpress, import and customs
Buying online allows us to source useful products, even if they are produced by companies located very far, quickly and easily. There are 3 main factors that make international product sourcing even more accessible today:
– Globalization helped to uniform the consumers’ tastes, allowing in this way to export the same products to different countries around the world;
– the digitalization of stores, which now can display their products on an online showcase and make them available to buyers worldwide;
– international agreements and treaties that favor free-trade through the re-modulation of customs duties.
The result of the above is the birth of giants like AliExpress, whose purpose is to be an online intermediary between companies and consumers.
AliExpress was developed for B2C business, for customers who occasionally buy products for personal use, however it is not uncommon to see small businesses that stock up on this platform.
In fact, AliExpress allows you to buy even wholesale merchandise, sponsoring the purchase with its famous coupons: at a higher cost (usually more than $100) the buyer gets quite advantageous discount coupons.
A small entrepreneur would spend $100 on average to source a small amount of products to place on his store. To be fair, there are many people who use AliExpress to replenish their company with goodies and interesting products that are difficult to find in their home country.
Being a platform that generally hosts (not exclusively, mind you) any kind of Chinese shops, AliExpress allows you to conclude transactions with foreign companies, thus favoring international trade.
However, if on one hand, the opportunities for saving money are abounding, on the other there are still problems with the reliability of the suppliers, the quality of the products and finally with the AliExpress import tax.
AliExpress import tax: I should pay duties on AliExpress products?
When you buy products from companies that are not located in your home country, your transaction will be regulated by a series of trade regulations issued by the country you reside in.
Depending on the location of the factory or of your supplier, from whom you purchased the goods, the rules could be those pertaining to regional trade or international trade.
In the first case, for example, EU countries benefit from the principle of free trade in the Common Market, or North American countries have special agreements in place. In the second case, there are international agreements stipulated by each country with third-party countries, such as China, or even bilateral agreements between the two countries.
These agreements are in place to facilitate the exchange of goods from and to China, improving the competition between the companies of the two territories and thus guaranteeing the end-consumer safety and controls over the imported products. In fact, the agreements are not based solely on the customs tariffs applied by the EU, or by your home country, they embrace broader sectors such as the protection of consumers health and safety, the protection of intellectual and industrial property, the application of a fair price, that does not circumvent national taxes on imported products.
Customs duties are a tax that must be paid for goods coming from abroad, hence there will be an AliExpress import tax applied on goods purchased on this online platform.
Generally speaking, all goods that are imported from abroad, exceeding the value of €22, in the EU case, must go through customs in order to be imported in the destination country, if the value exceeds €150 it can also be subject to customs duties.
Some concrete examples:
- a product with a value below €22 will not be checked by customs authorities;
- you will have to pay VAT and postal charges for parcels with a value between €22 and €149;
- you will be requested to pay customs duties, VAT and postal charges for products with a value of over €150.
AliExpress and customs: how the package is delivered.
When you purchase products on AliExpress, usually packages are not very large, therefore they can be sent via postal service or with a private courier.
In the case of small packages sent by postal service, the process is followed by the local postal services. Local postal services, generally handle the customs clearance of all postal parcels that come from foreign countries and are imported in the package destination country: should the sorting agents find anomalies (for example in the documentation, the type of goods, the price, etc …), they will proceed to forward a request to the shipper who will have to provide further clarifications.
If your package is sent via a private company such as DHL, TNT, UPS, packages will have to go through the Customs and, should there be any problems, you will have to provide clarifications to the Customs authority of your home country.
AliExpress and Local Post
When you buy wholesale products from AliExpress and the goods are shipped by postal service, you will receive an identification number that allows you to track the transaction, both on the Chinese platform and on your national postal service website. This code, known as tracking number, allows you to know, at a given moment, the location of the goods you purchased. Detailed information can be found on your national postal service website, where you will find a section to search the shipments, in this section, you will also be able to see shipment history from the moment you left China.
Every postal service will have a place where entering the tracking number you can check where is your package. Often when you read something that sounds like “Processing at the International Exchange Center” means that it arrives at the customs.
In general, however, if the word “stopped at customs” or “held by customs” appears on the tracking, it means that your package is stopped in one of the postal warehouses, that it has been checked and therefore some additional payment is needed.
AliExpress and private couriers
In the case of private couriers, these are controlled directly by the Customs. The Customs Agency has the task of verifying the packages or the authorizations and documentation necessary for that particular category of goods. The Customs Agency also has got the task of monitoring suspicious goods, those that presumably cannot enter the destination country due to national legislation that prevents their importation.
Customs checks are done on the documents and on the shipped products.
The first step consists of the sorting agents checking the customs bill and the documents accompanying your package. Here they will find the information on the type of product purchased, the price paid, the number of products, the weight and other details concerning the goods. A further check will look into the declared price and, consequently, the taxes to be paid as customs and as VAT to the destination country.
Follow-up checks will concern the type of goods to determine whether or not it complies with the national regulations.
The checks take place in the International Exchange Centers, a sort of gigantic warehouse where millions and millions of packages pass through every day. To accelerate the work, the sorting staff use logistic systems useful to speed up the customs clearance procedures and to immediately report any anomalies.
AliExpress and customs: the reasons why a package could be blocked
An AliExpress package could be stopped at customs for various reasons. Let us see together what they could be, by providing some examples:
- AliExpress package is blocked at customs because the declared price is likely to be lower than the actual value of the products. Some entrepreneurs mark a lower value on products, in order to pay fewer taxes and to enjoy the benefits of international agreements. Considering that the duties are not due for goods with a value below €150, an entrepreneur could declare a purchase of €130 when, in fact, he spent €200. A considerable saving since the duties are calculated on the type of product purchased;
- AliExpress package is be blocked at customs due to missing documentation. A widely used escamotage, to save up on customs taxes, is to indicate the contents of the package as “gift”. The term ‘gift’ is very generic and it does not add any useful information on the purchased products. On top of that, the gift product is considered an item for personal use, occasionally purchased on which can be added different customs taxes as compared to the goods destined for trade;
- AliExpress package is blocked at customs because it contains goods prohibited by the destination country legislation. There are products that cannot be imported from abroad because they are dangerous for the consumers’ health, which is the reason why their consumption is guaranteed only if the good comes from an accredited company. An example would be medicines, foodstuffs, raw materials and semi-finished products for confectionery, some types of drinks, etc… same goes for drugs, exotic animals, archaeological artifacts, corals, shells and products coming from endangered animals (like ivory);
- AliExpress package is also be blocked at customs if it contains unauthorized merchandise. Some products, although their importation is prohibited, could be purchased abroad with prior authorization. This is the case for explosive products, weapons, some types of plants, chemicals, alcohol and everything that needs some certification to be sold;
- AliExpress package is blocked at customs because it contains counterfeit goods. As we mentioned before, counterfeiting is illegal in most countries and the reports can be made by those who hold an industrial patent.
AliExpress and customs: what to do if the shipment is blocked?
What to do when a package is stopped at customs? The best behavior you can adopt so that the AliExpress package does not get stuck at customs is to follow the rules, learn about the customs laws and only do business with the serious companies on that Chinese eCommerce platform.
When you go on AliExpress, you can immediately see if a store is reliable thanks to the feedbacks left by past customers. Moreover, AliExpress allows you to contact the retailer through an instant messaging dedicated section where you will be able to negotiate with the online store for all your purchases.
In order to avoid for your AliExpress packages to be held at customs, make sure you do not buy prohibited goods in Europe, or those that need additional importation documents/authorization. Otherwise, if you still want to purchase them, find out about the required certificates and only work with specialized Chinese companies.
Ask the retailers to send you all the necessary documentation together with the package, entering the true value of the goods and their purchase price. You will not get any profits avoiding tax duties, incorrect information will only lengthen the delivery time of the goods. Make sure to add your contact details, such as the mobile number to ensure that the local post can contact you at any time, should there be anomalies.
Counterfeiting can be easily avoided by learning about the recognized industrial property rights in your home country. For example, each country will have a database containing all the trademarks and patents filed by its citizens, which could even be consulted online. The EU has got its own database, the EUIPO: in a matter of minutes, you can get all the necessary information on the registered trademarks and industrial property rights.
If the AliExpress package has already been blocked at customs you will have to wait for your national postal system’s communication or you could contact your local post offices. The post office operators will help you understand why the package was not cleared through customs and will let you know about the documentation needed to clear the goods for importation. You might be requested to provide additional documents, a copy of your ID, you tax ID code, VAT number, if you have it, as well as a copy of the invoice stating the purchase of the product, looks like a lot of work but do not worry! You will probably be able to do everything online from your office, without wasting any time.
If the AliExpress package is blocked due to anomalies, concerning the products, it could happen that the Customs Agency officials will examine it. You might be contacted for further clarification and to provide further documentation proving the purchase of the products.
How to buy products from China without being afraid of customs
In any case, the customs clearance of products is something that can very well take away a lot of time from your business. Entrusting the sale negotiation with AliExpress to a third-party company specialized in Chinese imports is probably the best solution for your business.
Yakkyofy offers a 360 ° service that includes:
- The search for a supplier
- The negotiation with the Chinese factories
- Quality checks
- The relevant documentation and certifications checks
- The shipment of the goods
- Custom clearance
- Delivery at your doorstep