TAX | DE MINIMIS | ADMISSIBILITY | PROHIBITED/RESTRICTED | CUSTOMS VALUATION | SURCHARGES

De Minimis Thresholds, Tax Rates, Customs Valuation Methods & Calculation, Customs & Carrier Surcharges, Admissibility, and Prohibited Restricted Commodities.

Please note that import tax rates, de minimis thresholds, admissibility requirements, customs valuation  methods, prohibited & restricted commodity regulations, customs, and carrier surcharges are dynamic and may change without advance notice. Current regulations and rates for each topic must be queried and confirmed prior to shipment using the indicated official sources.

FlavorCloud recommends that our merchants use these tools as a reference and then verify at the national/provincial level and/or with your commodity- and country-specific expert before shipping.

† FOB — “Free on Board” – Incoterm and basis method for Customs Valuation 
§ AUD$ — Australian Dollar
√ CIF – “Cost of Goods + Insurance + Freight” – Incoterm and basis method for Customs Valuation

CUSTOMS SURCHARGES***

***Customs and Carrier Surcharges are carrier, destination, and time specific. Items in orange apply to all consignments, and other items applied ad hoc, if applicable. Surcharges are dynamic and subject to frequent change by carriers without prior notice.

CARRIER SURCHARGES***

***Customs and Carrier Surcharges are carrier, destination, and time specific. Items in orange apply to all consignments, and other items applied ad hoc, if applicable. Surcharges are dynamic and subject to frequent change by carriers without prior notice.

Australia Notes

Import Duty/Tax De Minimis

In Australia, the Australian Border Force (“ABF”) and the Australian Taxation Office (“ATO”) have set the de minimis threshold for imports at $1,000 AUD FOB for both import duty and import tax (GST). If the value of the goods on your shipment to Australia is under $1,000 AUD (and is not ineligible for de minimis treatment), there is no duty, import tax (GST), or IPC payable at the time of import.

Key Takeaways

• For most goods with a value of $1,000 AUD or less, there are no duties, taxes, or charges to pay at the time of import.
• You must pay duties and taxes on some goods (like tobacco, tobacco products, or alcoholic beverages) regardless of their value. This category of goods is subject to an excise tariff and is not eligible for the $1,000 AUD de minimis duty/tax exemption.
• If the goods on your import shipment into Australia are valued at greater than $1,000 AUD, the goods will be subject to duty, GST, and IPC at the normal published rate, and these fees must be paid at the time of import.

Australia Customs Valuation Methods

General Australian Customs Valuation
https://www.abf.gov.au/imports/files/fact-sheets/fs-value-imported-goods.pdf

Duty
https://www.abf.gov.au/sdg-subsite/Pages/Customs-Duty-Calculation-Routines.aspx
FOB x Duty Rate (See FOB note below)

FOB Customs Valuation Calculation Method Note

Unlike CIF, the customs valuation process does not include freight or insurance costs in transporting goods from the place of export to the destination when calculating customs value. However, any inland freight or insurance costs incurred by the purchaser/importer before the goods leave the place of export must be included in the customs value.

Tax (GST)
https://www.abf.gov.au/importing-exporting-and-manufacturing/importing/cost-of-importing-goods/gst-and-other-taxes
CIF + Duty Amount x Tax Rate (See CIF note below)

CIF Customs Valuation Calculation Method Note

CIF = Cost of Goods + Insurance + Freight
+ Cost of Goods is the Transaction Value [actual price paid or otherwise would be payable by the buyer to the seller for the goods]
+ Insurance costs
+ Shipping charges

• Example: goods are being sold to the importer at $200 + $5, paid for insurance + $20 for shipping by the buyer, then CIF value is $225 (converted to local currency by Customs).
  • If the duty rate is 10%, then the duty amount for this import would be $22.50
  • If tax rate is 25%, then tax amount would be $61.88 [CIF + Duty = $247.50 x 25% tax]

Important GST Stipulations for Non-Resident Businesses Based on Annual Sales

Since July 2018, new regulations exist which may require non-resident businesses who sell goods, services, real estate, and other digital products to Australian consumers to register for, collect, and pay 10% sales GST to the ATO if their annual turnover to consumers in Australia is greater than $75,000 AUD or $150,000 AUD if a non-profit organization.

This is unique as it essentially requires the non-resident business to pay 10% GST, even if the original shipments were imported under de minimis thresholds and therefore were not assessed any import duty, tax, or fees at the time of import.

ATO has determined that non-resident businesses must register for, collect, and pay the 10% GST if both the following apply:

1. “You are carrying on a business or enterprise.

1. Your GST turnover from sales connected with Australia from your enterprise is equal to, or greater than, the registration turnover threshold of $75,000 AUD (or $150,000 AUD if you are a non-profit organization).”

The ATO has further clarified that you reach the GST turnover threshold if either:

1. “your current GST turnover’ (your turnover for the current month and the previous 11 months) totals $75,000 AUD or more ($150,000 AUD or more for non-profit organizations)
2. your ‘projected GST turnover’ (your total turnover for the current month and the next 11 months) is likely to be $75,000 AUD or more ($150,000 AUD or more for non-profit organizations).”

Bottom Line for FlavorCloud Customers

If you meet the criteria outlined above, you must register for, collect, and pay the 10% sales GST, even if the original imports were under de minimis threshold at time of import.

If you need to register for GST, further details, including GST registration options, definitions, resources, and links, are available here:

• Key Regulation: 2018 LCR 2018/1 – ATO Law Companion Ruling for GST on Low-Value Imported Goods
• How Australian GST Works
• If GST Applies
• ATO Non-resident businesses and GST and GST for Non-Residents
• GST Registration Options
• How to charge GST on imported services, digital products, and low-value imported goods
• GST Lodgment and Payment Options

Import Tax (GST) Exemptions

Examples are provided as a reference only. Please refer to the relevant legislation for full description and stipulations to determine if your products qualify for GST exemptions:
https://www.abf.gov.au/importing-exporting-and-manufacturing/importing/cost-of-importing-goods/gst-and-other-taxes/gst-exemptions

Excise Duty and Excise Tax

Commodities subject to excise duty and/or excise tax do not qualify for de minimis duty-/tax- free importation. In Australia, this generally applies to tobacco products, alcohol, and luxury automobiles. Please consult current regulations to confirm if your goods are subject to excise duty/tax prior to shipping.

Excise Duty (tobacco products)         https://www.abf.gov.au/importing-exporting-and-manufacturing/prohibited-goods/categories/tobacco

Excise Tax (wine and alcohol)            https://www.ato.gov.au/business/wine-equalisation-tax/

Australian Border Force (ABF) Import Processing Charge (IPC)

Generally, there is no IPC on imports to Australia valued at under $1,000 AUD for non-restricted commodities. However, an IPC may apply to your shipment depending on the total shipment value, import declaration type, method of transportation, and commodity.

• Please consult ABF’s IPC overview to determine if your shipment is subject to an IPC:

https://www.abf.gov.au/importing-exporting-and-manufacturing/importing/cost-of-importing-goods/charges/import-processing-charge

• For further details on Australian Import Declarations, please consult ABF’s Import Declaration Overview:

https://www.abf.gov.au/importing-exporting-and-manufacturing/importing/how-to-import/import-declaration

Customs and Carrier Surcharges

***Customs and Carrier Surcharges are carrier, destination, and time specific. Items in orange apply to all consignments, and other items applied ad hoc, if applicable. Surcharges are dynamic and subject to frequent change by carriers without prior notice.

Admissibility (Prohibited Goods) Background

Many products are subject to specific import requirements such as import licenses, permits, certifications, inspections, product/business, and other labeling requirements. These requirements are generally referred to as admissibility or OGA/OGD/PGA requirements (“Other Governmental Agency” / (“Other Governmental Departments” / “Partner Governmental Agency”). In Australia, these are referred to as Prohibited Goods and are administered by several federal agencies. While some Prohibited Goods may be imported after specific conditions and/or requirements are met (import licenses/permits, testing, etc.), other goods may not be imported under any circumstances.

These admissibility requirements are subject to frequent change without advance notice and are entirely dependent on the commodity (HTS code), country of origin, country of import, and time of import. It is advised to regularly verify and validate admissibility requirements to ensure there are no import delays and to ensure the proper administrative steps are adhered to prior to shipment. Certain products are prohibited from being imported unless the relevant requirements/obligations are met. Significant fines, fees, delays, and storage charges can be assessed when these regulations are not followed. FlavorCloud always recommends that our merchants verify import requirements at the national and state levels and/or with your commodity- and country-specific expert before shipping.

Admissibility (Prohibited Goods) Resources

Certain commodities are prohibited or restricted depending on the country of import, country of origin, and the specific point at which the goods will be imported into Australia. Assessment of import requirements specific to your products can be done in Australia by consulting the Australian Border Force’s Overview of Prohibited Goods. This repository offers interactive query functionality to search for impacted commodities by category, description, keywords, and a list of items to check for potential import requirements.

An indication of impacted commodities is shown below. A current overview, along with direct links to the government department/agency responsible for ensuring that prohibited and controlled goods are not illegally imported into Australia, is available using this official:

https://www.abf.gov.au/importing-exporting-and-manufacturing/prohibited-goods/overview

• Animals and Plants

Fur products, endangered species, etc.

• BIOCON [Australia Government’s Biosecurity Import Conditions Database]

Interactive database of 20,000+ plant, animal, mineral, and biological products against which specific import requirements and permits are imposed. The database allows queries via quick search, scientific name, or HTS code.

• Consumer Products [containing toxic/controlled materials]

Glazed ceramics, cosmetics, novelty products, dog collars, lighters, pencils/paintbrushes, toys

• Consumer Products [banned for safety concerns]

Please consult the itemization of current product bans published by Product Safety Australia

• Defense & Strategic Goods [for military or dual military and civil use goods and technologies]

Biological agents, defense goods and technologies for military and/or military and civilian use, chemical compounds, nuclear/radioactive materials

• Drugs, Medicines, and Therapeutic Substances

Drugs and narcotics, growth hormones, new psychoactive and serious substance alternatives, precursory substances, prescription medicine, therapeutic drugs, substances, and goods

• Firearms and Weapons

Non-kitchen/cooking knives such as daggers, switchblades and pocketknives, bows/crossbows, throwing weapons, slingshots, body armor, guns, and laser pointers

• Hazardous Goods

Products containing asbestos, mercury, hazardous waste, explosives, ozone-depleting chemicals, pesticides, and other hazardous chemicals

• Intellectual Property and Cultural Heritage Items
• Miscellaneous

Wine, brandy, and other alcohol

• Tobacco

These Prohibited Goods Resources are published at the national level, are non-exhaustive, and are subject to a detailed legal notice. FlavorCloud always recommends our merchants use these tools as a reference and then verify at the national/state level and/or with your commodity- and country-specific expert prior to shipping.