A FedEx shipper's guide to paying international duties and taxes

 by Rianne Hill Soriano

When sending international shipments, each package is subject to assessment of duties and taxes imposed by the importing country's government. FedEx and even other couriers require shippers of international packages to pay taxes on dutiable packages sent outside the origin country.

Computation of Duties and Taxes

The amount to be paid for duties and taxes is based on the information provided on the air waybill, the commercial invoice, and other relevant documents related to the shipment. The Customs officials from the importing country assess each package and confirm the amount the responsible party needs to pay.

The computation of duties and taxes depends on the: product value, trade agreements, country of manufacture, use of the product, and the product's Harmonized System (HS) code, an internationally standardized system of names and numbers used to classify traded products.

Responsible Party for Paying Duties and Taxes

As duties and taxes are not yet included in FedEx's export rates, the amount is typically billed to the recipient, unless otherwise requested by the shipper that s/he must be the one billed for it. It is also possible for a third party such as a company with its own FedEx account number to be the one responsible for the payment of duties and taxes.

Confirmation of the responsible party is done when filling up the FedEx International air waybill or the FedEx Expanded Service International air waybill. The shipper can readily mark the appropriate choice from among: "Shipper," "Recipient," or "Third Party" as the one responsible for the payment of duties and taxes.

Shipper's Liability

In cases that the receiving party or the third party instructed to pay the duties and taxes for the package refuses to pay the fees, based on the contract of carriage with FedEx, "The shipper is ultimately liable for any duties and taxes assessed on the shipment." In this case, the shipper shall be billed for the dutiable/taxable package s/he sent.

FedEx Advancement Fee

There are circumstances when FedEx is required to pay certain duties and taxes in advance. In such a case that a specific country requires the duties and taxes to be paid prior to customs' release, FedEx asks for an Advancement Fee surcharge. This shall be billed to the responsible party asked to pay the duties and taxes for the shipment. The fee charged covers whatever FedEx pays in advance on behalf of the shipper.