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

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

Navigating the route from Malaysia to Bahrain requires a clear insight into customs duties and taxes. These calculations rest on key factors - the country of origin, the Harmonized System (HS) Code, Customs Value, the Applicable Tariff Rate, and any additional taxes and fees specific to your products. Start with the country of origin—the initial stepping stone in this journey—it's crucial to establish where your goods were originally manufactured or produced. Get this first step right and you're set on a path to accurately pinning down those all-important duty and tax costs coming your way.

Step 1 - Identify the Country of Origin

Step 1 in estimating your duties and taxes begins with the identification of the product's country of origin - a vital preliminary step for five main reasons.

First, it determines the tariff treatment your goods will receive - a key factor when figuring out expenses. Next, it unveils any specific trade agreements that could lessen your tax burden. For example, Malaysia and Bahrain, members of the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), offer reduced tariffs for certain items.

Third, it highlights import restrictions. In Bahrain, goods like narcotic drugs, archaeological artefacts, and certain chemicals face strict regulations.

Fourth, the country of origin affects trademark laws, ensuring your product doesn't infringe on local business trademarks. Lastly, it can expose any anti-dumping laws that might affect you - these are measures to protect Bahrain's economy from imported goods sold cheaply.

The trick here is to take the time to delve into the country of origin's landscape. You will unravel customs intricacies that directly impact your bottom line. It might seem tedious, but it ensures you're well-prepared, and your shipment slides through customs smoothly, avoiding costly hold-ups. Remember, an ounce of prevention is worth a pound of cure!

Step 2 - Find the HS Code of your product

The Harmonized System Code, universally known as the HS Code, is pivotal to international trade. This internationally standardized system of names and numbers is used to classify traded products and greatly smoothens the process of shipping goods across borders by making them universally recognizable.

Your product's HS code carries significant weight in terms of determining the import duties, taxes, and regulations that apply to your shipment.

The easiest way to obtain the HS code is generally by asking your supplier, as they are likely to be well-acquainted with the goods being imported and the related regulations.

However, if this isn't possible, don't worry - we have a simple, easy-to-follow method for you. Start by using an HS lookup tool, specifically the Harmonized Tariff Schedule. From there, input the name of your product in the search bar, and head over to the Heading/Subheading column. This is where you'll find your product's HS code.

A word of caution - ensure you select the HS Code with utmost precision. A discrepancy in the HS code can result in shipment delays and potential fines, due to incorrect or unexpected customs procedures. Your product's HS code not only dictates the charges and duties but also the potential restrictions that might apply to the product.

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

Step 3 - Calculate the Customs Value

If you're importing goods from Malaysia to Bahrain, it's key to understand that the customs value isn’t simply the price you paid for your goods. Sure, you bought that machinery for, say, $10,000 - but that's not your customs value! It's actually the CIF value - the Cost, Insurance, and Freight value. This means it's the total of the original price of your goods ($10,000, for example), plus the cost of international shipping ($2000 perhaps?), as well as any insurance costs (let's say $250). So in this example, your 'customs value' would be $12,250, not just the original $10,000 product cost. This is vital to complete your customs clearance with accuracy in Bahrain. Knowing the true customs value helps in preventing costly penalties and ensuring a fluent shipping process.

Step 4 - Figure out the applicable Import Tariff

An import tariff is a tax imposed by a country's government on foreign goods. For an item shipped from Malaysia to Bahrain, the applicable tariff is largely determined by its Harmonized System (HS) code. Tariffs in Bahrain follow the Harmonized System, which is globally recognized.

Here's how to find the appropriate tariff rate:
1. Consult Bahrain Customs' Tariff Schedule on their website.
2. Look for the HS code you determined earlier.
3. The assigned tariff will be listed next to it.

As an example, let's say you're importing a chair with the HS code 9401.30 which attracts a tariff rate of 5% in Bahrain. Assume your CIF costs are $500. The import duty calculated would therefore be 0.05500 = $25 USD.

Keep in mind, this is a simplified example and other taxes or regulatory fees might apply. It's always wise to seek advice from professionals or contact Bahrain Customs for any updates. Understanding import tariffs is crucial as they impact your product's final cost and, subsequently, your pricing strategy.

Step 5 - Consider other Import Duties and Taxes

Beyond standard tariff rates, you might face extra import duties based on your goods' country of origin and their type. For example, an excise duty could be levied on certain goods like alcohol or tobacco. If your goods are subjected to anti-dumping measures, you may also be liable for anti-dumping duties. So, if you're importing specific steel products (random example) from Malaysia potentially subject to anti-dumping, it's wise to inquire about such costs.

Arguably the most crucial tax you must consider is the Value-Added Tax (VAT). Bahrain currently levies a 5% VAT on the Cost, Insurance, and Freight (CIF) value of your imported goods. For an understanding, if your CIF value is $10,000, you'll pay $500 as VAT (10,000 x 5/100).

Remember, these are quick examples for illustration. Exact rates differ based on varying factors. Shortcomings in due diligence could have tangible financial implications, making a solid understanding of the necessary duties and taxes imperative. Having a reliable freight forwarder by your side can greatly alleviate these challenges.

Step 6 - Calculate the Customs Duties

Calculating customs duties in Bahrain for goods imported from Malaysia requires a keen understanding of different components: customs values, Value Added Tax (VAT), anti-dumping taxes, and Excise Duty.

Suppose you have a shipment priced at $10,000 with no VAT or anti-dumping taxes. The customs duty in Bahrain is 5%, so you'd pay $500 ($10,000 x 5%).

Now, let's assume the shipment cost is still $10,000, but there's a 10% VAT. First, calculate the customs duty: $10,000 x 5% = $500. Add this to the shipment cost: $10,000 + $500 = $10,500. Apply the VAT: $10,500 x 10% = $1,050. Your total due would be $1,550 ($500 + $1,050).

Lastly, picture a shipment worth $10,000 with a 10% VAT, 5% anti-dumping taxes, and 5% Excise Duty. Calculate customs duties ($500), VAT ($1,050), anti-dumping taxes ($500), and Excise Duty ($500). The total would be $2,550.

Don't let this complex process slow you down. DocShipper can manage every aspect of customs clearance efficiently and effectively, ensuring you are not overcharged. Reach out for a free quote within 24 hours and let us handle the logistics.

Bill of Lading

Navigating the watery path from Malaysia to Bahrain is simpler with a Bill of Lading (BOL) in hand. Critical to your international freight journey, it essentially signs over ownership of your cargo upon delivery. Think of it like passing a baton in a relay, but with boxes and crates instead. Electronic or telex release BOL brings twin benefits of speed and security, removing paper's sluggish pace. Over airways, the AWB, the BOL's airborne cousin, takes over the reins. Here's a tip for the uninitiated: always keep a copy of your BOL or AWB handy, so you're equipped to tackle any freight curveballs Bahrain or Malaysia might throw at you. With these documents, your cargo isn't just stuff—it's a well-documented parcel finding its way home.

Packing List

Getting your goods from Malaysia to Bahrain punctually and in perfect shape is crucial, right? An essential tool to achieve this is your Packing List. Imagine it as the DNA of your shipment; it identifies your goods' specifics: the number and type of items, their weight, and dimensions. The accuracy in completing the Packing List can't be stressed enough. It's not just a vital tool for handling and shipping - it's the backbone of customs clearances for both sea and air freight.

Remember the last time you received a parcel, and it wasn't what you expected? That's a result of a poorly done Packing List. If details mismatch, your goods may face delays or charges. So next time you're shipping goods from Kuala Lumpur to Manama, make sure your Packing List is as accurate as a navy seal's aim. It's not just paperwork; it's your ticket to a smoother shipping experience.

Commercial Invoice

Crafting a perfect Commercial Invoice for shipping between Malaysia and Bahrain can seem daunting, but it doesn't have to be. This crucial document serves as a record of the transaction between the exporter and the importer. It essentially contains a description of the goods, quantity, cost, freight, and insurance along with marks and numbers of the package.

Here's the catch: Any minor inconsistency between your Commercial Invoice and other shipping documents can trigger unnecessary customs holds or delays. So, ensure all details match at all times, including your Bill of Lading or Air Waybill.

Pro tip: A little-known fact, double-check and validate the Harmonized System (HS) Codes, as they differ between countries. In this case, it's wise to be aware of both Malaysian and Bahraini customs interpretations. These tips should help you navigate the choppy waters of shipping more confidently.