U.S. Customs Clearance丨Self-tax customs clearance VS tax-included customs clearance? Who is better?

Alternative title: Learn about self-tax customs clearance and tax-packaged customs clearance in one article!

For merchants who are new to cross-border e-commerce, it is often unclear whether logistics self-tax customs clearance and tax-included customs clearance can seriously affect the timeliness of customs clearance. There is only one word difference between self-tax and tax package. What is the difference? This article introduces it to you in detail.

01

Just one word difference, what exactly are self-tax customs clearance and tax-packaged customs clearance?

Self-tax customs clearance means that the seller uses the tax number (VAT) he applies for and provides it to the international freight forwarder (hereinafter referred to as the "freight forwarder"), who is responsible for the specific declaration and payment of import taxes.

Tax-inclusive customs clearance means that the freight forwarder handles all customs clearance matters, and all fees are added to the freight. The seller does not need to provide a VAT tax number for customs declaration, just pay the money.

Note: VAT stands for Value Added Tax, which is the tax identification number when paying taxes. If the seller registers the VAT tax number, he can apply for the deduction of import value-added tax after transportation.

02

Know the difference between self-tax and tax-package, and you need to pay attention to these things!

Sellers who have self-tax clearance should pay attention to the following points:

　Provide your tax ID number as early as possible. The seller needs to provide the tax number as early as possible so that the freight forwarder can prepare customs clearance information in advance and check the validity period of the tax number.

 Apply for a tax bill. After customs clearance is completed, a tax bill will be issued. The regular freight forwarder will provide the tax bill to the seller and customer for subsequent application for tax deduction.

　About advance payment of taxes. If the freight forwarder pays the tax in advance, the seller needs to pay an advance tax fee (similar to advance interest), or the seller can prepay the tax in advance based on the estimated tax rate without paying the advance fee.

Tax-packaged customs clearance seems to save time and money, but it also has other risks:

　Sharing freight forwarding tax numbers. Since the seller entrusts the freight forwarder to handle all customs clearance matters, the same account applied for by the freight forwarder may be used to serve multiple sellers, and there is a risk of sharing the freight forwarder's tax number, which is the so-called loss of both.

 “Low declaration” mode. In order to pay less tariffs, some freight forwarders will activate the "low declaration" mode. Once inspected by the customs, there will be a risk of passing on fines and warehouse rent to the seller.

　Risk of seizure. Since the seller borrows the freight forwarder's tax number to clear customs, and there will be subsequent customs inspections, there will be a risk of being detained.

03

Self-taxation VS tax-package? Who is better?

Tax-inclusive customs clearance seems to eliminate the need for sellers to do it themselves, which saves a lot of trouble, but the potential risks are huge.

Although self-tax customs clearance needs to be done personally, all information is in the hands of the seller. In addition to paying attention to timeliness, other risks are relatively small.

Self-taxation VS tax-package? Who is better? Major e-commerce platforms have begun to implement the withholding and payment model. When an order is generated, the platform will directly withhold the tax part according to local tax regulations and submit it to the tax bureau uniformly (even if the platform withholds and pays it, the seller still must be reported on time).

For sellers, it’s important to plan with a long-term view. Compared with the short-lived and cumbersome process, self-tax customs clearance brings far more stability and security than tax-packaged customs clearance. If you want to develop the US market in the long term, Shengshi Group will also strongly recommend that you adopt the self-tax customs clearance model.

About Shengshi Group

As a company committed to providing professional and efficient customs clearance and logistics services for Amazon merchants, Shengshi Group not only has more than 50 years of customs clearance experience and a Chinese green card customs clearance team, but also has obtained certification from the Customs and Trade Anti-Terrorism Cooperation Organization and has more than 300 self-operated Trailers and tripods are distributed all over the United States. Our rich customs clearance experience will definitely provide helpful assistance to each seller.