Australian businesses are increasingly looking towards international trade as a way to expand their reach into new customer markets and also to grow their own business. Australia has a thriving economy in the retail and online shopping sectors, and with the abundance of manufacturers in close proximity via Asia, it’s now easier than ever to create products and ship them into Australia.
However, for many first-time importers and exporters delving into international trade can be complex. To help our existing and future customers successfully navigate the import/export route, we’ve compiled a list of key considerations for importing and exporting goods into and out of Australia.
Generally, all goods imported into Australia by an individual or a company are liable for duties and taxes unless an exemption or concession applies. There are exclusions and restrictions to the use of the concessions. As a manufacturer importing goods into Australia, you may be eligible for concession schemes. The Australian Border Force administers a number of schemes for local manufacturers that includes allowing the importation of goods at free or concessional rates and the deferment of duty payment. Find out more on Facilitation and Concession Schemes on the Australian Border Force website.
4 components of international shipping
Cost of Freight
The total cost of shipping the good from and to the delivery location.
Commercial Invoice
A bill of sale which confirms the origin, description and commercial value of the goods.
Duties and Taxes
Duties and taxes vary in every country. Be aware of the expected import tariff charges.
Pickup and Delivery
Clearly define when and how the goods will be delivered in the receiving country.
Quick links to our shipping guides
Opens as a PDF
Air Courier Services
Documents
Commercial Invoice
Freight Insurance
Follow these guidelines
1. Understanding Duties and Taxes
When importing goods into Australia, you may be required to pay Goods and Services Tax (GST) if the value of the goods exceeds $1000. The value of the goods, also known as the Customs Value, will determine exactly how much you will pay. If your goods in the one shipment have been declared on a Commercial Invoice at AUD $5000, then the GST payable amount is $500.
In addition Customs duty is typically charged as a percentage of the Customs Value, while the GST is calculated at 10% of the Value of the Taxable Import (VoTI).
If sending freight from one country to another, it’s important for the receiver to understand the duties and taxes which may apply to the goods being shipped. HS Tariff codes are especially important to understand. Find out more on the Austrade website austrade.gov.au.
Import Processing Charges
The Australian Border Force (ABF) applies Import Processing Charges (IPCs) when you make a declaration for imported goods.
Communication of Import Declaration (N10) and Warehouse Declaration (N20)
Charges are applicable based on the declared value of the goods being imported.
Electronic Lodgement
< $1000 – No Charge
> $1,000 <$10,000 = $50.00 ≥$10,000 = $152.00 Documentary > $1,000 <$10,000 = $90.00
≥ $10,000 = $192.00
Warehoused Goods (N30)
Warehoused Goods
(all declared values)
Electronic = $23.00
Documentary = $63.00
For more information, see Australian Customs Notice No. 2015/44 (83KB PDF).
Biosecurity cost recovery charges on imports
The Australian Border Force (ABF) collects biosecurity cost recovery charges (biosecurity charges) on behalf of the Department of Agriculture, Fisheries and Forestry (DAFF). This applies when you make a declaration for imported goods. (ABF website abf.gov.au)
Let’s take a look at some examples of this.
Air freight: $38.00 fee. Customs brokers and importers of shipments over AUD $1,000 value.
Sea freight: $58.00 fee. Customs brokers and importers of shipments over AUD $1,000 value.
There is a comprehensive list of additional information available on the abf.gov.au website.
Calculating duties and taxes
Example 1
Let’s say you’re importing a batch of designer handbags from Italy, with a total declared value (Customs Value) of AUD 20,000.
1. Customs Duty:
Firstly, you need to determine the duty that applies to your goods. The rate varies based on the type of goods and the country of origin.
Suppose the applicable duty rate for designer handbags from Italy is 5%. Then the Customs Duty you’d have to pay would be 5% of AUD 20,000, which is AUD $1,000.
2. Value of the Taxable Import (VoTI):
Next, we need to determine the Value of the Taxable Import (VoTI), which is used to calculate the GST. The VoTI is generally the sum of:
- the Customs Value of the goods (20,000)
- the Customs Duty ($1,000)
- the cost of transport and insurance to bring the goods to Australia (also known as the International Transport and Insurance or ITI).
For simplicity’s sake, let’s say the ITI costs are AUD 2,000.
So, the VoTI would be the sum of AUD 20,000 (Customs Value) + AUD 1,000 (Customs Duty) + AUD 2,000 (ITI), which equals AUD 23,000.
3. Australian Goods and Services Tax (GST):
The GST is calculated as 10% of the VoTI. In this case, it would be 10% of AUD 23,000, which amounts to AUD 2,300.
Note: For goods with a value of AUD1000 or less, there are generally no duties, taxes or charges to pay to Australian Border Force/Customs.
Therefore, for importing this batch of designer handbags from Italy, you would be expected to pay AUD 1,000 in Customs Duty and AUD 2,300 in GST, for a total of AUD 3,300 in taxes. When you look at the overall cost of goods and factor in shipping and insurance costs, GST and Customs Duties, we can see when budgeting to import in this particular example, the overall cost to get the goods into Australia and released from Customs would be 13% of the Customs Value of the goods.
Note that this example is a simplified illustration and actual costs can vary due to factors such as potential adjustments to the Customs Value or variations in transport and insurance costs.
Commercial Invoice
2. Navigating Tariffs
Tariffs, another form of import duty, are also a key consideration when importing goods. These can vary widely based on the type of goods and their country of origin. In many cases, tariffs are lower or even eliminated for goods originating from countries with which Australia has Free Trade Agreements (FTAs).
Harmonized System (HS) Codes
HS Tariff Codes are
Item type
Country of Origin
Value
QTY
Total
3. Compliance with Regulations
Compliance with Australian regulations is essential. The Australian Border Force oversees import and export compliance and is responsible for enforcing laws related to prohibited and restricted goods. There are also industry-specific regulations and standards you might need to comply with, depending on the goods you’re dealing with. Non-compliance can result in hefty penalties or even seizure of your goods.
4. Freight and Logistics
Choosing the right freight and logistics partner (One World Courier) is crucial for successful import and export of your goods. As in the previous examples, you need to consider factors such as shipping costs, transit times and carrier reliability. As a provider of a FREE Freight and Shipping Management Platform, One World Courier has built a reputation for high-level customer via our Freight Operations Teams who offer helpful advice and will work with carriers and customs services in over 200+ Countries and Territories to assist the smooth delivery of goods.
5. Leveraging Free Trade Agreements
Australia has numerous FTAs in place. These agreements provide preferential access to certain markets by reducing or eliminating tariffs. FTAs can significantly reduce the cost of importing and exporting goods, making it cheaper and easier for businesses to expand internationally.
However, to leverage an FTA, your goods usually need to meet certain rules of origin requirements, which stipulate that the goods must be predominantly produced or undergo significant processing in the country of origin.
6. Documentation
Proper documentation is key to ensuring a smooth import and export process, therefore International bookings made through the platform have a series of system checklists built in and will prompt the user to provide digital bills of lading, air waybills, commercial invoices and additional documentation that may be required to prepare for a smooth and fast customs clearance process. As a full freight management solution, the platform also creates shipping and address labels which can be printed on any thermal printer, and can be emailed to the manufacturer or shipper.
Example 2
Suppose you are importing a batch of high-end audio speakers with a total declared Customs Value of AUD 50,000.
Customs Duty:
Certain electronic equipment, such as audio speakers, may be duty-free under an Australia Free Trade Agreement with the country of origin. However, you need to ensure that the goods meet the specific rules of origin requirements.
Next, as we did previously, we determine the Value of the Taxable Import (VoTI), which is used to calculate the GST.
- the Customs Value of the goods ($50,000)
- freight costs ($1,200)
- insurance costs ($700)
- the Customs Duty ($2,500)
- GST ($5,440)
The total amount payable is AUD$7940
The golden rule is to always remember there are additional costs involved in importing goods into Australia, therefore either you can do this yourself or use a service such as One World Courier.
Your responsibilities as a receiver of goods imported into Australia.
Always remember that as an importer, it’s your responsibility to declare the value of your goods to Australian Border Force (customs), and pay the relevant duties and taxes in a timely manner. Should you fail to do so, you risk fines and penalties from Australian Border Force. There are also cases where failure to pay duties and taxes can result in your goods being classified as ‘abandoned’, and sold off at auction at a later date.
Your responsibilities as a sender of goods to another country.
As a shipper, your responsibility centres around creating the commercial invoice and declaring the correct value of the goods in Australian dollars. There are also occasions where the commercial invoice can be in the currency of the receiving country. Either way, the customs and excise authority in the receiving country will be able to calculate the duties and taxes to be paid.
No goods will be released by the customs service unless all duties and taxes have been paid in full. Failure to pay duties and taxes, as in the previous example means your goods being classified as ‘abandoned’.
Always remember, as the shipper of goods to another country, it’s important to communicate with the receiver and monitor the shipment. For a positive delivery outcome, tracking and monitoring responsibilities should be shared by both the sender and receiver.