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

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

Demystifying the world of import duties doesn't have to be complex. It's all about having the right information and knowing how to apply it. Calculating customs duties may seem like a daunting task at first, but it essentially involves gathering key pieces of information such as the country of origin, HS code of the goods, their customs value, the applicable tariff rate, and any additional taxes or fees that may be relevant. The cornerstone of it all is identifying where the goods were produced or manufactured, because this serves as your starting point in the entire process. So strap in and let's take this journey together to understand the process of estimating duties & taxes when importing goods from Malaysia to Cambodia.

Step 1 - Identify the Country of Origin

First things first, identifying the Country of Origin sounds obvious, but it's far from trivial when it comes to estimating your import duties from Malaysia to Cambodia. Here are five reasons why:

1. Anti-dumping laws: If the goods are considered dumped (sold at unfairly low prices), that can attract additional duties.

2. Preferential rates: Trade agreements between Malaysia and Cambodia could afford you lower duty rates.

3. Specific restrictions: A product originating from a specific country might be subject to restrictions or higher nominal duties.

4. Countervailing duties: These exist to counteract foreign subsidies and could affect your import costs.

5. Quick customs clearance: Authorities will likely clear goods faster if they're familiar with the Country of Origin.

Now, let's talk trade agreements. Cambodia-Malaysia has the ASEAN Trade in Goods Agreement (ATIGA) in effect. That means if your goods qualify under ATIGA, you could enjoy reduced or even zero duties.

Remember, each item has its restrictions. For instance, Cambodia restricts certain animal or plant-based products to protect local industries and biodiversity. So, know your product well and be aware of potential roadblocks.

Don't shy away from seeking professional advice. Regulations change, and staying on top of them takes time. Experts can help navigate these waters, leaving you to focus on your business. Over to you!

Step 2 - Find the HS Code of your product

The Harmonized System (HS) code is a six-digit number that classifies globally traded products. Established by the World Customs Organization, this code helps to identify the rate of duty, any restrictions, and other important information pertaining to a specific product. It's essential when you're shipping goods internationally, especially when preparing the necessary customs documentation.

Your supplier should usually be the first point of contact for finding the HS code of your product. They’re experts in their field, familiar with the product, and should understand the associated regulations.

However, if obtaining the HS code from your supplier isn't feasible, you can seek aid from an HS lookup tool. We recommend using the Harmonized Tariff Schedule, which is a reliable source where you can search for your product's HS code. Here's how you can do it:

1. Enter the product name in the provided search bar.
2. Look at the Heading/Subheading column.
3. The HS code of your product should now be visible.

Accuracy in the selection of the HS code is of utmost importance. A discrepancy in the code can lead to cargo delays, fines, or even seizure by customs authorities. So, getting the correct HS code is not just a formality, but it can also prevent unwanted complications.

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

Step 3 - Calculate the Customs Value

If you've ever wondered why the customs value is different from your product's price, here's the deal: this value isn't just about the goods' price. It also includes the cost of international shipping and insurance, a sum known as CIF (Cost, Insurance and Freight). Let's look at an example. Suppose you have goods worth $1,000 (USD), and you pay $100 for shipping and $50 for insurance. Your customs value for this shipment from Malaysia to Cambodia would be $1,150 ($1,000 + $100 + $50). This is crucial to understand as it forms the basis for calculating the duties. Being aware of this might help sidestep any unexpected costs and pave a smoother path for your goods.

Step 4 - Figure out the applicable Import Tariff

An import tariff, in simple terms, refers to a tax imposed on goods imported from another country. It is crucial to determine the applicable tariffs to have a clear estimate of the costs involved. In Cambodia, the general import tariff structure revolves around four levels: 0%, 5%, 10%, and 20%.

To identify the specific tariff for your product imported from Malaysia, refer to the ASEAN Trade in Goods Agreement (ATIGA). On the site, you'll need your Harmonized System (HS) code, identified in the previous step.

Let's say you're importing plastic bottles, which falls under the HS Code 392330. Assume the CIF (Cost, Insurance, and Freight) value is USD 10,000.

1. Go to the ATIGA site, enter the HS code '392330', and Malaysia as the 'Country of Origin'.
2. Check the import tariff. Suppose it's 10% for your product.

To calculate your import duties:

Import Duty = Import Tariff % x CIF value
= 10% x 10,000
= USD 1,000

So, your import duties would be USD 1,000. This calculation is a straightforward way to budget your operations and stay ahead in your planning process.

Step 5 - Consider other Import Duties and Taxes

As you embark on importing goods from Malaysia to Cambodia, it's essential to remember that the standard tariff is not the only cost levied. Depending on the product's nature and its country of origin, other import duties may apply.

Let's consider the Excise Duty first. This is generally imposed on goods like alcohol, tobacco, or petroleum products. For instance, if you're importing whiskey, the excise duty could be approximately 10%. But remember, this is just an example, actual rates might vary.

Next, ponder over the Anti-Dumping Tax. If Cambodia finds the goods imported from Malaysia are priced below their actual market value, an Anti-Dumping Tax could be levied to level the playing field.

Last, but definitely not least, consider the Value-Added Tax (VAT). In Cambodia, it is a standard 10% on the customs value of imported goods. So, if your shipment's worth $1000, you'll need to budget an additional $100 for VAT.

Remember, these figures are examples to illustrate the concepts. Before making calculations, always check the latest rates for an accurate financial plan. Understanding these in-depth aspects ensures smoother, more predictable trade transitions, in turn, empowering your business growth.

Step 6 - Calculate the Customs Duties

Calculating customs duties in Cambodia involves tallying a variety of potential charges based on the customs value of your goods. The customs value is the CIF (Cost, Insurance, and Freight) price of the goods upon arrival at the Cambodian border in USD.

In the first example, if your goods have a customs value of $10,000 and a customs duty rate of 10%, your customs duty is simply $1,000 - no VAT here.

On the other hand, if the same goods were subject to a 10% VAT, you would calculate the customs value plus the customs duty, which totals $11,000, and assess the 10% VAT on this sum, resulting in a total cost of $1,100 for Customs Duty and VAT.

In a third scenario, if anti-dumping taxes of 5% and Excise Duty at 20% were to be applied in addition to the previous charges, you would calculate these extras on the customs value as well. Therefore, you'd have $500 for the anti-dumping tax and $2,000 for excise duty in addition to the existing $1,100.

Understanding and calculating these charges can be complex, but don't worry - DocShipper is here to navigate every step of the customs clearance process for you. We ensure that you're never overcharged and can provide a free quote in less than 24 hours. Trust us to handle your global shipping needs, tackling every complexity in the world of customs duties.

Bill of Lading

Diving into the world of freight forwarding, the Bill of Lading (BOL) is one of the most important documents when shipping between Malaysia and Cambodia. This isn't just a mere piece of paper; it's your title deed to the goods, proof that ownership has transitioned. For instance, if you're a Malaysian Electronics company sending a batch of smartphones to Phnom Penh, once your BOL is issued, it confirms that these smartphones are officially bound for Cambodia.

Going digital with a 'Telex release' can turbocharge this process, speeding up cargo release and slashing wait times. Think of it as express shipping for your paperwork. For air cargo, a similar document - the AWB (Air Waybill) comes to play.

Remember, these documents not only protect your goods, but keep global trade fair and regulated. So you can take command of your shipments, armed with a clear understanding of their role in cross-border transactions.

Packing List

Navigating Malaysia-Cambodia freight forwarding? Your Packing List is your lifeline! Objectively, this document paints a clear image of your shipment – detailing the type, quantity, and other specifications. When assembling this, think - precision! A vague or incorrect Packing List could result in hiccups during customs clearance. Here's the story - you're shipping 200 bamboo furniture sets via sea freight from Malaysia to Cambodia, and only declare 150 in your Packing List. Anomalies like these send red flags to customs officials, potentially leading to delays or penalties. From ocean depths to air heights, your Packing List holds equal weight for both sea and air freight. So, sharpen those details, double-check every number, and make your Malaysia-Cambodia shipping a smooth sail. Your Packing List is more than a document, it's your ticket to successful international trade.

Commercial Invoice

Shipping goods between Malaysia and Cambodia? Your Commercial Invoice is a non-negotiable! This document provides detailed information about the items involved, like the description, quantity, and value. But remember, it's not just about filling in the blanks! Accuracy and consistency with other shipping documents is critical and may significantly affect customs clearance. For instance, discrepancies between your Commercial Invoice and the Bill of Lading could result in unnecessary delays. So, take that extra minute to cross-check information across your documents – it might save you hours, even days, in customs! Here's a tip: if you're shipping electronic goods, ensure you specify brand, model, and serial number on your Commercial Invoice to keep customs officials smiling. Happy shipping!