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Customs, duties & taxes

FAQ

Customs, duties & taxes

FREQUENTLY ASKED QUESTIONS

Get to know about the duties & taxes exemption and how customs authorities collect duties and taxes on goods.

CUSTOMS

A customs duty is a tariff or tax levied on goods when transported across international borders. Customs duties are imposed in order to protect a country’s import and export revenues by controlling the flow of goods into and out of the country.

While revenue is the primary consideration, customs duties may also be levied to protect a domestic industry from foreign competition.

Malaysia uses the CIF valuation method (Cost, Insurance and Freight), which means that the import duty and taxes payable are calculated from the total shipping value of the item including the cost of freight and insurance during shipping, not just the product itself. Some duties are also calculated based on their weight or volume.

Duty or tax exemption is an xemption from the Sales Tax under clause 99, Table B Sales Tax Order (Exemption) 1980, is a facility provided for the benefit of local factory operators that manufactures goods that are exempted from the Sales Tax which are meant for export and also on control items under the Ration Control Act 1961 which is bound under the price control to get taxed raw materials (including packaging material) excluding the sales tax.

Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the rate of duty is ad valorem (Charge levied as a percentage of value of the item it is imposed on, and not on the item’s quantity, size, weight, or other such factor).

No. 

Exemptions from payment of duties and taxes can be referred to the Customs Duties (Exemption) Order 2017 and Sales Tax (Person Exempted from Payment of Tax) Order 2018. These Orders covers all types of exemption and is updated regularly by Customs.

Customs value is essential to determine the duty to be paid on an imported good.

Undervaluation of goods is taken very seriously by the Customs and can results in a fine or most likely the shipment can be seized.

Cost, insurance and freight (CIF) means that the seller delivers the goods to the buyer on board the vessel or procures the goods already so delivered. The risk of loss or damage to the goods transfers when the goods are on board the vessel, such that the seller is taken to have performed its obligation to deliver the goods whether or not the goods actually arrive at their destination in sound condition, in the stated quantity or, indeed, at all.

The import duty and taxed payable are calculated on the complete shipping value, which includes the cost of the imported goods, the cost of freight and the cost of insurance. In addition to duty, imports are also subject to Sales Tax and some products are to excise duty as well.

Free On Board (FOB) means that the seller delivers the goods to the buyer on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods transfers when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.

The payment of duties and taxes are typically the responsibility of the receiver.

The duty threshold is the amount at which a person begins paying taxes based on the declared value of an item. For shipments entering through designated international airports, duty/tax is not applied to goods below a FOB value of MYR 500.

Duties and taxes are levied by Customs in the destination country and the receiver is responsible for paying them.

Yes, but you need a DHL account to pay duties and taxes for the receiver.

If you want more information on DHL Account, do not hesitate to contact our Customer Service on DHL Express Facebook page today!

Yes, whether a shipment is a gift or not, it must still go through an import procedure as determined by custom’s law in the destination country. The shipment is cleared through customs based on the origin country, the value and quantity, but not its purpose. You will need to pay customs duty and taxes only if the value of the gift is above a stated local threshold.

Duties and taxes are most typically not included in the price of the goods you purchase online. When purchasing goods online, some or all of these goods may not originate in the country you reside in. When goods are not shipped domestically (within your country) or within a single customs union, such as the European Union, you are liable to pay any inbound duties and taxes which your local customs authority deems appropriate.

To ensure the DHL courier can deliver your goods in shortest possible transit time, when we enter your country, DHL pays the customs authority immediately on your behalf for any duties and taxes that are due on the goods. DHL only releases the goods to you upon the full repayment of any duties and taxes that were paid on your behalf.

For shipments cleared by DHL Express Malaysia, we will be paying the duties and taxes incurred on behalf of the importer. A Duty Invoice will be issued to the importer.

If the amount of duties and tax is above RM25, there is a disbursement fee (3% of duties and tax or RM50 whichever is higher) charged by DHL for paying an upfront on the duties and tax incurred for the clearance of the shipment.

The Malaysia Customs Department determine the amount of duties and taxes based on several factors:

  1. The HS code that is used to classify the product type.
  2. The value of the goods, including freight and insurance fees (CIF), help customs to determine the duties and taxes and to clear your shipment. 
  3. The goods description on the commercial invoice, including the product's end-use and country of manufacture. 
  4. International trade agreements between countries can influence the amount of taxes and duties on a shipment.
  5. The Incoterms on the commercial invoice define the agreement between sender and receiver about who pays for shipping costs, including taxes and duties.

There are 3 ways to do payment for custom duties and taxes:

A. Online banking
You may click on the link below, key in your waybill number and proceed with the arrangement. https://delivery.dhl.com/waybill.xhtml?ctrycode=MY

Payment should reflect immediately.

B. Online transfer
DHL Standard Chartered Account Name: DHL Express (Malaysia) Sdn Bhd Account Number: 794156111983 – Once payment is done, please send an e-mail to mycashibduty@dhl.com for verification.

Payment will take within 2-3 working days to be processed.

C. Cash on delivery

For B2B shipments, if the duties and tax incurred exceeds RM1000, DHL Express will attempt to contact the importer prior to customs clearance. If the duties and tax incurred is below RM1000, we will proceed with customs clearance to expedite the delivery of your shipment.

For B2C shipments, if the duties and tax incurred exceeds RM500, DHL Express will attempt to contact the importer prior to customs clearance. If the duties and tax incurred is below RM500, we will proceed with customs clearance to expedite the delivery of your shipment. 

 Any disputes regarding the clearance will be reviewed on a case by case basis by DHL Express.

If a customer requires DHL Express to contact customer regardless of duty and tax amount, a Duty Confirmation Fee of RM53 will be charged per shipment.

Customs valuation is a customs procedure applied to determine the customs value of imported goods. Customs Value is determined using the Customs Valuation where transaction value (TV) is used. Transaction Value is to be based on the actual price of the goods to be valued, which is generally shown on the invoice. Malaysia uses CIF term to determine the Customs Value. Therefore the invoice value stated may have additional costs. The Customs Value is then used to determine the duties and tax calculation.

CIF VALUE = Total of Below [C+I+F]

C = Cost/Value in Invoice
I = Insurance
F = Freight as per IATA TACT Rate

IMPORT DUTY = CIF VALUE * IMPORT DUTY RATES

EXCISE DUTY = [CIF VALUE + IMPORT DUTY]*EXCISE DUTY RATES

SALES TAX = [CIF VALUE+IMPORT DUTY+EXCISE DUTY]*SALES TAX RATES

Yes, duties and taxes do not apply for parcels traveling within the European Union.

Yes, shipments to Langkawi require a K3 form and it is an individual K3.

All imported goods, both dutiable or not, must be declared in the prescribed forms and be submitted to the customs station at the place of import. 

A K2 form is used for the customs declaration of export while the K8 form is an application/permit to tranship or remove goods. 

In Layman's term, A K2 form is a declaration of export for dutiable and non-dutiable goods whereas a K8 form is a declaration of duty for not paid goods. 

Yes, DHL Express Malaysia can prepare customs declaration for our customers.

DHL Express Malaysia can clear shipments if the duties amount falls within the duties blanket amount without having to query to customer for duty confirmation. Customer Query (CQ) agent does not need to send to customer for duty confirmation and this can speed up custom clearance by avoiding customers having to respond to DHL Express for duty confirmation.

The blanket approval for DHL Express to proceed clearance of a shipment without seeking customer’s confirmation is RM500. However, customers may propose a higher threshold specific for their account. This can be informed through the Commercial and Gateway Clearance Team with a written email proposal from the customer. A list of such customer has to be maintained by the Gateway Clearance Team.

  • This is manual process which gateway and commercial needs to manage
  • Clearance authorization is the charge code for it in case it needs to be triggered
  • This is pure manual as the standard SOP threshold set at RM500

There is no specific maximum threshold set, however a threshold which exceeds RM7000 has to be reviewed by DHL Express Malaysia's Finance Team before proceeding. 

Any shipment that requires to goes through re-declaration will need to seek Custom’s approval before going through the process. Customers need to provide an appeal letter to the assigned person in DHL Express in order to show to the Customs to get the confirmation. The reasons why shipments need to go through re-declaration are as follows:

  1. Wrong invoices provided
  2. Declaration did not follow Customs requirement
  3. Wrong instruction/ information received
  4. HS Code wrongly stated in invoices

IMPORT DUTIES & TAXES

Yes, importation of shipments may incur duties or taxes or both.

IMPORT DUTIES

  1. Import Duties are imposed to shipments based on the items (0% – 30%)

  2. Calculated based on the CIF value of the shipment

  3. Duties are exempted if importer is in bonded area, designated area, Licensed Manufacturing Warehouse

EXCISE DUTIES

  1. Excise Duties are imposed on controlled items defined by RMCD

  2. Cigarettes, tobacco, alcohol, spirit, liquor, gambling equipment, vehicles

SALES TAX (SST)

  1. SST is imposed on all imported shipments

  2. 5% or 10% unless item is listed as Non Taxable Goods or the importer has exemption under Person Exempted from Payment of Tax Order

  3. SST is not chargeable if shipment is moved to a Special Area/Bonded Area

Yes, for non-controlled and non-restricted items with a Cost, Insurance and Freight (CIF) value of below RM500, no duties and taxes will be imposed. This is referred to as a De Minimis Value.

Personal Goods Exempted from Payment of Duties/Taxes (Pursuant to Item 19 of the Customs (Exemption) Order 1988). The items below are exempted from payment of duty/tax subject to the following limits and conditions:

  • Used mobile goods other than “household effect”
  • Liquor – does not exceed 1 liter
  • Tobacco – does not exceed 225 grams & cigarettes – does not exceed 200 cigarettes
  • New clothes – does not exceed 3 pairs
  • Medicines – does not exceed the use of 1-month consumption
  • A new pair of shoes
  • Electrical appliances or portable batteries for personal care and hygiene does not exceed 1 unit each
  • Food preparation materials does not exceed the value of RM75
  • Gifts and souvenirs (excluding liquor, tires, tubes, tobacco, cigarettes and vehicles) where the total values do not exceed RM400. If the goods are from Langkawi, Pulau Tioman or Labuan, the total value allowed for exemption does not exceed RM500

Yes, for goods that exceed the limit set out in question 10 will be subjected to duty and tax are as follows:

  • 30% on the value of goods other than liquor, tires, tubes, tobacco, cigarettes
  • Liquor (e.g. Alcohol/Spirit), tires, tubes, tobacco and cigarettes are in accordance with the duty/tax rates set out in the Customs Duty Order 2007

Malaysia import sales tax is a tax levied on the manufacture of taxable goods in Malaysia and the importation of taxable goods into Malaysia.

Malaysia’s tariffs are imposed on an ad valorem basis, with an average applied tariff of 6.1 percent for industrial goods. Malaysia import tax is at the rate of 5 or 10 percent, or a specific rate depending on the product category as declared by the harmonised systems code (HS code).

Download the full list of import sales tax rate for all goods here.

To calculate Malaysia’s import sales tax, add up the value of the goods, freight costs, insurance, the amount of import duty and the amount of excise duty, multiply by the sales tax rate. The result is the amount of SST you'll need to pay customs for your shipment.

Goods listed under the Sales Tax (Goods Exempted From Sales Tax) Order 2018 are not subjected to import sales tax

Malaysia import duties is a tax levied on goods that are subject to import duties and imported into the country

Malaysia import duty is levied on an ad valorem basis but may also be imposed on a specific basis. The ad valorem rates of import duties defined in terms of a fixed percentage of value ranging from 0% to 30%.

To calculate Malaysia's import duty on goods, add up the value of the goods, freight costs, insurance and any additional costs, then multiply the total by the duty rate. The result is the amount of import duty you'll need to pay customs for your shipment.

Malaysia's excise duty is a duty imposed on dutiable goods manufactured by a company licensed under Section 20, Excise Act 1976. This duty is also imposed on the same goods when imported. 

Goods subject to Excise Duty are gazetted in the Excise Duty Order 2017. The goods are:

  • Sugar-Sweetened Beverages (SSB)
  • Motor vehicles
  • Alcoholic beverage
  • Cigarettes include Tobacco and Cigars
  • Mahjong Tiles
  • Playing cards

To calculate Malaysia's excise duty on imported goods, add up the value of the goods, freight costs, insurance and the amount of import duty, multiply by the excise duty rate. The result is the amount of excise duty you'll need to pay customs for your shipment.

When customers receive an email or a SMS from DHL Express Malaysia on the payment of outstanding duties and taxes, customers can pay to DHL Express Malaysia via the following methods:

1.           Bank Transfer

DHL Standard Chartered Account

Name: DHL Express (Malaysia) Sdn Bhd

Account Number: 794156111983

Once the payment is done, please send an e-mail to mycashibduty@dhl.com for verification and the payment will take within 2-3 working days to be processed.

2.           FPX payment

You may click on the link in SMS or email received, key in your waybill number and proceed with the payment. The payment should reflect immediately.

3.           Cash on delivery

You may pay cash upon the delivery of your shipment to our DHL Express Malaysia courier.

No, exportation of shipments does attract duties or taxes or both. However, there is CESS payment chargeable for Rubber Products.

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