Kilts and Customs Duties - An Example

[KiltedPilot]

On another thread there was some discussion on whether choice of delivery method really makes a measurable difference to average to import costs.

Based on a recent experience, I thought I’d post two case studies on how much it cost to import identical parcels worth $156.02 by two different methods. (My actual example was US to Canada, but the numbers are similar when importing to US or UK).

Case study: Two deliveries. Exact same items. Exact same value. Exact same retailer. Exact same customs declaration. Fully accurate declaration. Only difference -- delivery company. Item value $156.06.

Import costs via UPS:

GST $7.80
PST $10.92
UPS Brokerage Fees $41.05 (including taxes on their brokerage fees)
Total = $59.77

Import costs via USPS / Canada Post:

GST $7.80
PST $10.92
Canada Post Brokerage Fees $5
Total = $23.72

GST is General Sales Tax (5%). PST is Provincial Sales Tax (7%).

In the first case, the total import cost adds up to 38% extra on the original order value -- so it’s pretty significant cost. Worth thinking about!

Obviously there is an enormous difference between these two costs. The entire difference is due to UPS having a very much higher fee for collecting the very same taxes and duties. (Note: FedEx is much the same).

One delivery method incurs at least 60% less total import costs over the other.

There is a separate issue in that the second method is cleared by government agents (the CBSA), rather than a private customs broker (UPS), and the government agents often waive duty. UPS never do.

The bottom line here is that the second delivery method is always, repeatably, at least 60% cheaper than the first. Sometimes it is 100% cheaper (if duty/taxes are waived entirely), but it is NEVER less than 60% cheaper.

By careful choice of delivery service, the total import cost can be reduced significantly, and reliably so. Thus, to some extent, I tend to consider available delivery methods when making my purchasing decisions.

In my personal situation, this means if duty is involved, I’m happy to receive a parcel sent via USPS, or Japan Post, or Royal Mail, etc. but will think twice if FedEx, UPS or DHL are involved.

I hope this shared experience might help others considering international purchases.

Mike

[Mr. Kilt]

Excellent post, Mike!
I buy alot of stuff from the US and overseas, but I only buy from people or companies who will ship through the mail. If they say they'll only ship via one of the courier companies, I find someone else to buy from.

[McClef]

I have had various items from the US and Canada but have never been hit by taxes for anything kilt related (and that includes a kilt). The only time I was hit was when I imported a DVD set that could not be obtained over here.

The Post office charged me VAT based on the declared value and a handling charge for the Customs work involved - that was a flat fee of £4 which they informed me was the same irrespective of the value of the item.

Yet a second DVD set came through without any charges whatsoever and it was a higher value than the first.

All were originated through the postal services.

[RockyR]

Another way to avoid customs issues (and exorbenant shipping charges) is to order items, when available, from a company within your country's borders.

I can't speak to Canadian Customs (and for Canadian Companies), but we absorb all shipping costs from Scotland and all US Customs fees. Prices we quote our customers on our site are actual 'to your door' prices, many times with free shipping (on orders over $200) and mostly 'tax free' (ALL states except PA, where we only charge tax on applicable items). No surprises = happier customers.

Just my $.02

[bricelythgoe]

I did not want to say it in the other thread, so I am glad it was said here. I never had any surprise shipping charges when my kilt came from N. California. Rocky makes a very good point here. If you are in USA, try and get it in the USA.

Brice

Another way to avoid customs issues (and exorbenant shipping charges) is to order items, when available, from a company within your country's borders.

I can't speak to Canadian Customs (and for Canadian Companies), but we absorb all shipping costs from Scotland and all US Customs fees. Prices we quote our customers on our site are actual 'to your door' prices, many times with free shipping (on orders over $200) and mostly 'tax free' (ALL states except PA, where we only charge tax on applicable items). No surprises = happier customers.

Just my $.02

[OC Richard]

I was amazed, around five years ago, when a kilt I bought from a place in Scotland arrived (here in the USA) and a couple months later a bill from the US Government came for nearly $200. I don't remember now what agency.

I've been buying stuff from the UK, Canada, and Ireland for 30 years and this is the only time that's happened to me.

Yes it behooves us to buy local when we can.

[KiltedPilot]

I can't speak to Canadian Customs (and for Canadian Companies), but we absorb all shipping costs from Scotland and all US Customs fees.

Hi Rocky,

Some specific feedback for you. I've ordered three kilts from USA Kilts, in three separate orders, for delivery to Canada.

Duties/taxes were waived for 2 of those orders, and I was billed taxes for just one of those orders. The brokerage fee for that order was $5 (for about $43 in actual taxes).

If you had sent those orders to me via UPS, I'd have paid over $120 just to cover UPS's brokerage fees.

Thus your choice of shipping method (Global Priority Mail from USPS) has saved me $115 is UPS fees, plus taxes on two kilts (another $80-$90 probably).

Thank you!

There is a perception that duty can be entirely a lottery, and to an extent that is fair comment. However, your choice to use USPS and not, say, UPS, was guaranteed to save me at least $115 (the difference in brokerage fees). The saving would have never been less than $115, because UPS (like FedEx) always collect taxes and duties (unless the amount is below the legal minimum). The "lottery" component was that the saving was as much as $200 in this case, but it was always guaranteed to be at least $115.

Again, it is worth highlighting that the major portion of the saving was not statutory government "taxes and duties", but was "brokerage fees" charged by the courier for their services.

Thanks for great service, Rocky.

Mike

[Cherub]

GST is General Sales Tax (5%)

just one quibble and it's minor

GST is Goods and Services Tax. Soon to be HST in Ontario Harmonized Sales Tax.

And i myself have noticed (and been hit by) the UPS charges and I never get things sent by them if another option is available preferably Canada Post/USPS it just plain cheaper and with registered post just as safe.

[MacBean]

Burnett's and Struth kilt made the journey from Canada to US to Canada and back to the US without a single customs fee using the national postal services.

[tyger]

In a thread some months ago, there was the expressed opinion, or fact, that no duties would be charged if a package declaring "ethnic garments" were imported into the USA. Is there a US Customs Xmarks member who can verify this as true, and tell us exactly where in the code this can be found?