What is De Minimis?

0
997
What is De Minimis?

Were you looking for what we will be talking about in this blog, or did you just stumbled upon us? Either way, you’ll get the answer to what you were looking for. 

If you are planning to cater to an international audience, you’ll be introduced to a complex world of excessive customs and tax clearance.

For those who are confused, de minimis value is a term very prevalent when you are hustling with international shipping. 

Let’s go ahead and try to understand the de minimis threshold and why it’s necessary for your business. 

What is de minimis?

According to the WTO definition, the de minimis rule refers to the minimal amounts of domestic support that are allowed even though they distort trade.

It is capped at 5% of the value of production for developed countries and 10% for developing countries. 

Complex? Well, in simple terms de minimis threshold gives the maximum value up to which no import duties or taxes can be collected from the sellers.

So, if your goods are valued below these specified values, then they can enter that country duty-free. Won’t that be helpful? 

De minimis comes from the Latin phrase ‘de minimis non-curat lex’ which, in its absolute sense, means that ‘the law doesn’t care about trifling things’ (nontaxation of such trifling things >> everything else).

Let’s look at some de minimis values to give you a better idea!

Country wise values

Like other trade regulations, the de minimis level also differs from country to country. When you are deciding on prices for your products, make sure to look at shipping costs, clearance costs, and other costs. 

According to the Global Express Association report dated November 2021, the de minimis for the USA is 800 USD, an export-friendly approach for other countries.

Another such country with high value is Bahrain with 790 USD, Australia with 750 USD, and  New Zealand with 706 USD.

Other values that you should keep in mind include that of  India at 4 USD, South Korea at 150 USD, Japan at 88 USD, and Singapore at 298 USD.

Also, keep in mind that the EU abolished VAT de minimis of 22 Euro earlier as of 1 July 2021. 

An important clause to pay attention to when you are searching for the de minimis threshold is that the countries have some specific remarks for which products are eligible for the de minimis threshold.

It may seem like a lot of work, but you get used to it with time. 

Disclaimer: Please note that the values provided below are subject to change by the federal authorities at any time. iThink Logistics cannot be held responsible for any inaccuracies or decisions made based on the information listed

CountryDi-minimus In National Currencyin USDin SDRGEA Remarks
Andorra150 EUR (Customs duties)174122
Angola100 USD10070Personal shipments; fluctuates weekly depending on exchange
Argentina50 USD503512 shipments per year and only for postal shipments
Armenia200 Armenian Dram232162private shipments
Australia<1000 AUD750525For customs duties. GST is charged for overseas registered
vendors for e-commerce shipments.
Austria150 EUR (Customs duties)174122
Azerbaijan300USD300210private shipments
Bahrain300 BD790553Only for B2C; No de minimis for B2B.
Belarus22 EUR2618Private person; non-commercial shipment (provided weight
doesn’t exceed 10Kg. If the limit is exceeded the payments are:
Belgium150 EUR (Customs duties)174122
Belize50 USD5035
Benin100 USD10070Informal arrangement on the ground for up to 100 USD
Bhutan3000 BTN4028
Bolivia100 USD10070
Bosnia and Hercegowina150EUR174122private shipments
Bulgaria150 EUR (Customs duties)174122
Burkina Faso100 USD10070Informal arrangement on the ground for up to 100 USD
Burundi100 USD10070Informal arrangement on the ground for up to 100 USD
Brazil50 USD5035Only for postal shipments.
Brunei400 BND296207
Cambodia50 USD5035
Cameroon50 USD5035Informal arrangement on the ground for up to 50 USD
Canada20 CAD1511For shipments from US and Mexico (USMCA) de minimis for GST is 40 CAD; for duties it is 150 CAD
Cape Verde100 USD10070
Central African Republic50 USD5035Local document agreement
Chad50 EUR5841
Chile30 USD3021Only for postal shipments.
China50 RMB85
Chinese Taipeh2000 TWD7250Reduced from 3,000 TWD on 1/1/2018
Colombia200 USD200140Only for VAT, restricted to countries with Free Trade Agreement
that include VAT waiver
Comoros100 EUR11681Not regulated. Informal arrangement
Congo, Dem.Rep.100 USD10070
Congo, Rep. Of50 EUR5841Informal arrangement
Cook Islands100 NZD7150
Côte d’Ivoire80 EUR93Commercial shipments
Croatia150 EUR (Customs duties)174122
Cyprus150 EUR (Customs duties)174122
Czech Republic150 EUR (Customs duties)174122
Denmark150 EUR (Customs duties)174122
Djibouti100 USD10070Not regulated. Informal arrangement
Dominica150 XCD5639
Dominican Republic200 USD200140
Ecuador400 USD and 4kg400280Only for postal shipments.
Egypt400 USD400280Informal arrangement on the ground for up to 400 USD and <
400 kg
Estonia150 EUR (Customs duties)174122
Fiji400 FJD (personal items)192134
Finland150 EUR (Customs duties)174122
France150 EUR (Customs duties)174122
French Guyana25 USD2518
Gabon38 EUR44Local agreement
Gambia200 USD200140Informal arrangement on the ground for up to 200 USD
Ghana100 USD11681De minimis raised to 200 USD, but not yet documented.
Georgia300 Lari9566private shipments
Germany150 EUR (Customs duties)U122
Greece150 EUR (Customs duties)174122
Guadeloupe25 USD2518
Guinea Republic80 USD8056
Guinea-Bissau50 USD5035Local agreement
Guinea Equatorial50 USD5035Informal agreement
Hong Kong, ChinaFreeport
Hungary150 EUR (Customs duties)174122
Iceland2000 Icelandic Krona1611Private & Commercial Shipments
India250 INR (CIF)42
Indonesia3 USD (CIF)32Changed from 75 USD. Shipments to individuals subjected to
one time per day deminimis regardless of port of entry
Iran<50 USD5035
Ireland150 EUR (Customs duties)174122
Israel75 USD7553private shipments
Italy150 EUR (Customs duties)1741220-150EUR VAT due. 150EUR+ VAT and Duty. However, a single
formal entry is required for all entries (from 0EUR).
Jamaica20 USD2014
Japan10000 JPY8862
Kazakhstan500 EUR580406Private shipments; The total value of the shipments received by
a consignee must not exceed 500.00 EUR per month
Kenya20 USD2014Informal
Korea, Rep. Of<150 USD (Non USA Import)150105Only personal shipments and samples, except medicine, herb
medicine, wildlife-related products, quarantined items such as
Kyrgyzstan200 EUR232162Max weight is 31Kg. Max 2 items per commodity.
Latvia150 EUR (Customs duties)174122
Lesotho249 ZAR1712Intra-SACU
Liberia3 USD32
Lithuania150 EUR (Customs duties)174122
Luxembourg150 EUR (Customs duties)174122
North Macedonia22 EUR2618from 22 to 45 only VAT rate applicable, above 45 EUR, duty and
VAT rate applicable
Malawi50 USD5035
Malaysia500 MYR12084
Mali100 USD10070Informal agreement
Malta150 EUR (Customs duties)174122
Martinique150 EUR174122Only duties and taxes de minimis; VAT apply over 25 EUR
Mauritius20 EUR2316Only for personal shipments
Mexico50 USD5035Duties and taxes. Except for products of difficult identification such as liquids, powder or pills or products with an import permit requirement
Montenegro75 EUR8761private shipments
Morocco1213 Moroccan Dirham13595
Mozambique12 USD128
Myanmar50 USD5035
Netherlands150 EUR (Customs duties)174122
New Zealand1000 NZD7064941000 NZD for customs duties only. GST is charged for registered
overseas vendors from 1 Dec 2019
Niger100 USD10070Informal agreement
Nigeria250 USD250175Informal agreement
Norway350 NOK4129Private shipments
Oman10 USD107Informal arrangement on the ground for up to 10 USD
Pakistan10 USD107Informal arrangement on the ground for up to 10 USD
Panama100 USD10070CIF
Peru200 USD200140
Philippines10000 PHP206144
Poland150 EUR (Customs duties)174122
Portugal150 EUR (Customs duties)174122
Romania150 EUR (Customs duties)174122
Russia200 EUR0The limit is restricted to shipments per importer (CIF) to all destinations served (for more details, please see ‘areas served’)
Rwanda120 USD12084
Saint Lucia60 XCD2216
Sao Tome and Principe25 EUR2920Informal agreement
Saudi Arabia1000 SAR266186
Senegal100 EUR11681Informal agreement
Serbia50 EUR0private & commercial shipments
Seychelles3000 SCR210147
Sierra Leone100 USD10070Not regulated.
Singapore<400 SGD298208
Slovakia150 EUR (Customs duties)174122
Slovenia150 EUR (Customs duties)174122
South Africa500 ZAR3525Informal arrangement on the ground for up to 500 ZAR
Sudan100 USD10070
Spain150 EUR (Customs duties)174122
Sweden150 EUR (Customs duties)174122
Tansania3 USD32
Thailand1500 Thai Baht4733
Uganda50 USD107Informal agreement
Ukraine150 EUR174122150EUR (including transportation) for legal entities, 100EUR for private individuals (from 1 July 2019)
United Kingdom135 GBP (Customs duties)188131
United States800 USD800560
United Arab Emirates270 USD270189
Uruguay200 USD200140Non-commercial shipments, only 3 shipments per year per
person each up to 200 USD.
Venezuela100 USD10070
Vietnam1000000 VND4028New circular 191, which might be effective in April, will require express carriers in Vietnam to comply with the following:
a. Import shipment with value under de minimis threshold and
Zambia2000 USD2Personal shipments
Zimbabwe10 USD10

But you would be rightfully wondering how it affects you, aren’t you? Knowing the level will help you estimate the landed cost which you can further communicate to your buyers.

There are other benefits as well! Read on to find them out. 

How does de minimis affect your business?

Your customers pay for the selling price, handling charge, freight, insurance, duty (if applicable), sales tax, and cost of return freight (unless you agree to cover a portion of it).

Due to this, and other trade restrictions, many customers might feel discouraged to buy products from you. 

Trust us, the de minimis level can assist you advantageously if you are looking towards entering the international business.

You need to understand different barriers that might restrict your shipments and similarly strategize your selling strategies. 

You would know how B2C businesses usually value lower than B2B businesses! So, when you are shipping with us, a large percentage of your shipments will clear duty and tax-free to specific countries, giving you a significant margin for your profits.   

Furthermore, the rule provides faster clearance to businesses and increases the opportunity to sell into markets competitively.

According to a worldwide survey, 56% of surveyed individuals mentioned that they would buy more if the duties are eliminated or reduced. 

Next time you are thinking about setting up warehouses and operations to expand your business internationally, look at the various exemptions and ease of business they provide.

Not only will there be a significant reduction in your costs, but you’ll be able to provide better customer service to your buyers! 

Courier aggregators in India