USA customs clearance and tax calculation steps you should know. 2021 useful guideline and tips

The United States is the largest economy in the world with the biggest companies in the world. In addition, purchasing power is higher than in most countries. These factors create favorable opportunities for businessmen.

The USA has its own rules and regulations of importation from other countries. In this article, we are going to talk about all steps of importation to the US from China.

Suggestions for beginners

1. Include all information required on your customs invoices.
2. Prepare your invoices carefully. Type them clearly. Allow enough space between lines. Keep the data within each column.
3. Make sure that your invoices contain the information that would be shown on a well-prepared packing list.
4. Mark and number each package so it can be identified with the corresponding marks and numbers appearing on your invoice.
5. Show a detailed description on your invoice of each item of merchandise contained in each package.
6. Mark your goods legibly and conspicuously with the country of origin unless they are specifically exempted from country-of-origin marking requirements, and with such other marking as is required by the marking laws of the United States. Exemptions and general marking requirements are detailed in Chapters 29 and 30.
7. Comply with the provisions of any special laws of the United States that may apply to your goods, such as laws on food, drugs, cosmetics, alcoholic beverages, radioactive materials, and others. (See Chapters 33, 34, and 35.)
8. Observe the instructions closely on invoicing, packaging, marking, labeling, etc., sent to you by your customer in the United States. He or she has probably made a careful check of the requirements that will have to be met when your merchandise arrives.
9. Work with CBP to develop packing standards for your commodities.
10. Establish sound security rules at your facility and while transporting your goods for shipment.

1.    Pre-importation

CBP – Customs border protection.

CBP is the nation’s border enforcement agency. Its responsibilities are controlling, regulating, and facilitating the transportation of carriers, people, and commodities between the US and other countries.

CBP officers.

Here are the details of CBP representatives in Hong Kong.

11/F., St. John’s Building

33 Garden Road, Central

Hong Kong

Tel: 011-852-2230-5100

Shipment Value

In the US, Shipment is based on FOB. This means it includes the cost of merchandise, documentation, and transportation. The price you are paying or payable should be declared in the customs. In other words, you should declare the price that is indicated in the invoice. Don’t forget that customs have the right to track the real value of your goods on the market and compare.

Get import Permit

In most cases, you don’t need an importation permit. But for particular goods being imported, you may need an import license or permit.

Here you find the list of goods that may require a permit or license.

Even if you don’t need an import license, you should fill out CBP entry forms. Here you can read more about entry forms. You will need to give your importer number.

If you own a business, your IRS business registration number is your importer number. Here you can find more about IRS business registration numbers. But if you don’t own a business, then your Social Security number can work as your importer number.

2.    Entry

When your goods arrive in the United States, the importer should file documents with the port director at the port of entry. The shipment is not considered legal if it hasn’t arrived within the port of entry, duties have been paid and the importer is not registered by CBP.

Merchandises can be entered only by the owner, purchaser, or customs broker.

Documents

Within 15 calendar days after the arrival of the shipment to The US, the following documents should be presented to the port director.

• Entry Manifest (CBP Form 7533) or Application and Special Permit for Immediate Delivery (CBP Form 3461) or another form of merchandise release required by the port director
• Evidence of right to make entry,
• Commercial invoice or a pro forma invoice when the commercial invoice cannot be produced,
• Packing lists, if appropriate,
• Other documents are necessary to determine merchandise admissibility.

Summary documentation

Entry summary documentation is represented and duties are paid within 10 working days at the customhouse. The summary documentation consists of:

• Return of the entry package to the importer, broker, or his authorized agent after merchandise is permitted release,
• Entry summary (CBP Form 7501),
• Other invoices and documents are necessary to assess duties, collect statistics, or determine that all import requirements have been satisfied. This paper documentation can be reduced or eliminated by using features of the ABI.

Right to make entry

Goods arriving in The United States by the commercial carrier must be entered by the owner, buyer, authorized employee, or by the customs broker. CBP officers can’t act as agents for importers, however, they have the right to give advice and assist in the process of customs clearance.

Examinations

Examinations are conducted to determine:

• The value of the goods for customs purposes and their dutiable status,
• Whether the goods must be marked with their country of origin or require special marking or labeling. If so, whether they are marked in the manner required,
•  Whether the shipment contains prohibited articles,
•  Whether the goods are correctly invoiced,
•  Whether the goods are more than the invoiced quantities or a shortage exists,
• Whether the shipment contains illegal narcotics.

Your shipment will be assigned a representative who will provide the safety of goods. Certain goods pass specials controls to determine whether they meet requirements or not. These products are foods and beverages, drugs, and others.

If CBP authorities find goods damaged or broken, that products will be categorized as “nonimportation”. This means you won’t pay duties for that products.

Formal and Informal entrance

A formal entry is used only for importations valued at more than 2.500 USD. Formal entry requires an entry bond since it ensures payment of applicable duties.

Under usual circumstances, an informal customs entry is used only when the total value of the shipment is less than 2.500 USD and for personal consumption.

3.    Compliance

Informed compliance is a responsibility between CBP and the importers.

Reasonable Care

Reasonable care is the explicit responsibility of the importer. CBP can give several reasonable care advice, however, it is impossible to cover all possible issues that can appear.

Compliance assessment

Compliance assessment is a systematic evaluation of an importer’s systems. The assessment tests imports and transactions, review the importer’s internal controls. The compliance assessment is conducted according to 19 U.S.C. 1509.

Compliance assessments will evaluate the company’s applicable customs operations such as:

• Recordkeeping,
• Merchandise classification/trade statistics,
•  Merchandise quantities,
• Antidumping/countervailing duty operations,
•  Quota conformity,
• Merchandise value,
• Warehouse or foreign trade zone operations, Merchandise transshipment,
•  Special trade programs (GSP, CBI, others).

Rates of duty

All goods imported into the United States are subject to duty or duty-free entry by their classification under the applicable items in the Harmonized Tariff Schedule of the United States

Taxability

Duty percentages depend on the HTS code and the country of origin. Most merchandise is dutiable.

Here you can find the HTS code of your product.

Once you have defined the HTS code of your good, then you can calculate the duty that you will owe.

For example, if we are importing electric bikes from China to the US.

1. 0% (duty rate) x USD invoice value

0% x 10.000 USD = $0

1. Merchandise process fee x USD invoice value

0.3464% x 10.000 USD = 34.64 USD

1. Harbor maintenance fee x USD invoice value

0.125% x 10.000 USD = 12.5 USD

Total 0 (duty) + 34.64 (MPF) + 12.5 (HMF) =46.94 USD.