Freight Shipping between Malaysia and Romania | Rates – Transit times – Duties and Taxes

How to calculate duties & taxes when importing from Malaysia to Romania?

Cracking the code of duties and taxes when importing from Malaysia to Romania can seem like a puzzle, but it's simpler than you might think. By mastering a few key components - the country of origin, the Harmonized System (HS) code of the product, the customs value of that product, the rigorous tabulation of the applicable tariff rate, and consciousness of any other taxes or fees that might apply - you'll be laying a strong foundation for your import strategy.

Where step one is concerned, it's all about location, location, location. That's right, you need to accurately determine where your goods were born or, in other words, where they were manufactured or produced. Identifying the country of origin is like putting a pin in the map to navigate the realms of international trade!

Step 1 - Identify the Country of Origin

Knowing the Country of Origin - Malaysia in our case is pivotal for five key reasons:

1. Duty rates: They directly rely on the item's origin, affecting your shipment's total cost.
2. Trade sanctions: Malaysia might have specific trade adherence that can impact your import process.
3. Import restrictions: Certain goods from Malaysia may face limitations or extra checks when imported to Romania due to health, safety, or protection policies.
4. Trade agreements: Harness the Malaysia – EU Free Trade Agreement, potentially lowering customs duties.
5. Accurate documentation: Your paperwork validity depends on the precise mention of the Country of Origin.

So, get the HS code only post confirming the Country of Origin. In terms of trade between Malaysia and Romania, it's good to note that Malaysia is a part of the ASEAN–EU Free Trade Agreement, allowing some items to have decreased or zero rate duties when shipped to Romania.

However, keep an eye out for Romanian import restrictions, especially on agricultural, electrical and mechanical items. To shrug off stress, plan ahead, review your product list and always vet regulations beforehand. Smooth trade is possible with diligent prep!

Step 2 - Find the HS Code of your product

The Harmonized System (HS) Code is a globally standardized system of numbers used to classify traded products. It is essential for businesses dealing in global trade as it simplifies the declaration of goods at custom points and helps in accurately calculating duties and taxes.

When it comes to finding your product's HS Code, the quickest way is usually to get in touch with your supplier. As experts in their field, they're familiar with the products they handle and the relevant regulations, including HS codes.

Should that not be an option, don't worry! We're going to walk you through a simple process to find it on your own. Your very first step is to visit the Harmonized Tariff Schedule. Once you're there, simply type your product's name in the search bar and wait for the results. Look at the Heading/Subheading column - that's where you'll find the HS Code!

Now, bear in mind, It's crucial to be correct with your HS Code. An inaccurate code can lead to unforeseen delays and even possible fines. And we all want to avoid unnecessary hiccups when it comes to international shipping, don't we?

Here's an infographic showing you how to read an HS code.

Step 3 - Calculate the Customs Value

Figuring out customs values can be tricky, right? Think of it as more than just the price tag on your products. In fact, it's computed based on the Cost, Insurance, and Freight (CIF) value of your shipment. That means it's the total sum of your goods' market price, the cost of shipping, and insurance expenses - all in USD. For instance, if you've bought products worth $10,000, paid $500 for shipping, and $100 for insurance, your customs value is $10,600. By calculating the customs value this way, you'll avoid any surprises at Romanian Customs and ensure smooth clearance of your goods imported from Malaysia.

Step 4 - Figure out the applicable Import Tariff

An import tariff is essentially a tax imposed on goods imported into a country, which serves to protect domestic industries from foreign competition and generate government revenue. In Romania, which is indeed part of the European Union, the Common Customs Tariff (CCT) applies. To find out applicable import tariffs on your product, you can use the TARIC System - European Customs.

Here's a quick guide:

1. Plug in the HS code you've previously identified, along with the country of origin (Malaysia).
2. View the specific duties and taxes applied to your product.

As an example, let's assume you're importing a type of furniture (HS code: 9401.61) from Malaysia. When we enter this in the TARIC system, it might show a Most Favored Nation (MFN) tariff rate of 2.7%.

If your insurance and freight costs (CIF) are, say, $10,000, then you calculate the import duty as follows: $10,000 (CIF) 2.7% (tariff rate) = $270. So your import duty would amount to $270.

This simple but crucial step is instrumental in ensuring smooth and cost-effective shipping. By accurately determining the import tariff, you can avoid unexpected costs and ease your item's path through customs.

Step 5 - Consider other Import Duties and Taxes

Understanding the variances in import duties and taxes can be potentially complex, but crucial for avoiding unexpected shipping costs. Aside from the standard import tariff rates, Romania, like other countries, charges various specific imports.

For example, there might be an excise duty applied, common on alcohol or tobacco products. Say you're importing a shipment of premium whiskey from Malaysia; an excise duty of around 30% might be levied.

Anti-dumping taxes could be another concern. These countervailing duties aim to protect domestic industries from overseas products sold below market value. So, if you bring in Malaysian-made steel at an unusually low price, expect to face these taxes.

However, one of the most definitive costs is the Value Added Tax (VAT). In Romania, the typical VAT rate is 19%, meaning a $1000 product would lead to $190 in VAT.

Remember, these are simply examples to illustrate the concept, and real-world figures might vary. Always consult with a trusted freight forwarder or customs consultant to determine the exact levies on your goods, equipping your business better for international commerce.

Step 6 - Calculate the Customs Duties

In Step 6 - Calculate the Customs Duties, you'll determine the total cost of importing goods into Romania from Malaysia. The formula includes the customs value of goods, Value Added Tax (VAT), anti-dumping taxes, and Excise Duty.

Let's say you're importing handbags valued at $5000, with a 5% customs duty. Your customs duty is $250. Now, assume a 19% VAT. Although no VAT applied here, the calculations total $250.

Importing electronics valued at $1000 with a 10% customs duty and a 19% VAT amounts to $290. Here, you first calculate customs ($100) and then VAT, considering product value + customs duty ($1,10019% = $209).

Bringing in alcohol valued at $2000 with a 15% customs duty, a 19% VAT, 35% anti-dumping tax, and a $50 Excise Duty, you face a more complex scenario. Customs duty totals $300, VAT equals $447, and anti-dumping taxes come to $700. The total tax considering Excise Duty becomes $1497.

Remember, accurate calculations help avoid overcharges. If you want peace of mind, turn to DocShipper's customs clearance services. We ensure you pay no more than you should. Contact us for a free quote within 24h, and let us navigate all global customs clearance processes for you.

Bill of Lading

As you journey through the logistics landscape between Malaysia and Romania, the Bill of Lading (BOL) serves as your navigational compass. This key document acts like a baton in a relay race marking the transition of ownership from you, the exporter, to the recipient. Be it a container filled with electronics or spare auto-parts, every sea freight journey necessitates a BOL.

An easier alternative might be a 'telex release'. This electronic BOL speeds up the process by allowing you to exchange the document online, saving you precious time. Travelling by air? You'll need an Airway Bill (AWB) instead.

Remember, error-free documentation paves the way for smooth customs clearance. As you strategize your shipping plan, reviewing the BOL for accuracy is a must, acting as your number one defense against any shipment delays.

Packing List

A Packing List is your detailed roadmap when shipping goods from Malaysia to Romania. Just as a pilot can't fly without a flight plan, your freight can't journey across sea or air without a comprehensive Packing List. It lays out all the crucial information customs officials need, like item descriptions, quantities, weights, and dimensions. By law, shippers need to provide this, and accuracy is a must. Suppose you're shipping electronic components from Kuala Lumpur to Bucharest, and the list is inaccurate. Customs could hold up your shipment, result in costly delays. So, explore your shipment thoroughly, total up every transistor, capacitor, and circuit board. A carefully created Packing List streamlines your shipping journey, keeping your goods on course and arriving on schedule.

Commercial Invoice

The Commercial Invoice is a critical document, acting as a roadmap for your goods from Malaysia to Romania. It needs to be clear, accurate, and align with your packing list and bill of lading. Specifics the customs inspectors look for include a detailed description of the goods, quantity, value in the shipping currency, shipper's and consignee's contact details, and the country of origin. Make sure these are consistent across all your documents to avoid delays. A real-world tip? Always double-check for typos or inconsistencies, and consider including additional information like HS code and weight, making the customs officer's job easier and your shipping experience smoother. It's all about simplifying their investigation and showcasing transparency - this speeds up your customs clearance.

Certificate of Origin

Navigating customs from Malaysia to Romania can be choppy waters, but with a Certificate of Origin (CoO), you're cruising. Why? The CoO proudly vouches for your goods' birthplace. If your merchandise was crafted in Malaysia, declaring so could unlock preferential customs duty rates - a potential game-changer in your profit margin. Don't leave it to chance though; get your products' CoO from a credible Chamber of Commerce, stating the country of manufacture unequivocally. Here's a case in point: an electronics exporter capitalized on Malaysia's favorable trade agreement for lower duty rates in Romania only because their CoO confirmed their goods as Malaysian. Long story short - source your Certificate of Origin. It's a simple step that can save you a bucket and guide your shipment safely to Romanian shores.

Certificate of Conformity (CE standard)

When shipping goods from Malaysia to Romania, one vital document you'll need is the Certificate of Conformity (CoC) to EU's CE standard. This certificate is not merely a quality assurance; it's an endorsement that your product meets the European Safety Standards - a non-negotiable for accessing the European market, including Romania, confirming that the product conforms with legal requirements. Keep in mind it's different from US standards, which require their own conformity certifications. Without this CoC, you may face customs clearance hiccups, unnecessary delays or even fines. So make sure your products comply with this European safety standard, and get them certified before freight forwarding to smoothen your international shipping process.