All You Need To Know About Hong Kong Import Custom Tariff and Duty Tax

Hong Kong has long been a leading global trade and financial hub. It’s not hard to see why, given its many strengths such as its strategic location, ease of doing business, and most of all — its free trade policy.

In 2021, Malaysia's exports to Hong Kong were a staggering US$18.49 billion, according to statistics by Trading Economics.

The most common goods that are imported to Hong Kong in 2021, according to the reports from the Observatory of Economic Complexity, are integrated circuits, Semiconductor Devices and Refined petroleum. It is safe to say that during the last 26 years, the export of Malaysia to Hong Kong has increased with an annualised rate of 6.17%, from $4.04B in 1995 to $19.2B in 2021.

If you're looking to import goods into Hong Kong, you should be well-acquainted with customs duty rates. It is vital to understand what type of Hong Kong customs tariff and duty taxes will apply to your organisation for seamless cross-border shipping.

How much are Hong Kong import taxes and duties?

One major reason why Hong Kong is so attractive for international businesses is that it is a free port. It does not levy any customs tariff, surcharges, taxes or tariff quotas on imported or exported goods.

Hong Kong has also signed a Free Trade Agreement with ASEAN countries, under which Hong Kong commits to allowing tariff-free entry for all products and granting tariff-free access to all products from ASEAN member states — Malaysia included. 

What goods are subject to taxes and duties in Hong Kong?

Generally, imports into Hong Kong are tax-free, excluding the following ‘dutiable goods’: liquors, methyl alcohol, tobacco and hydrocarbon oil. The amount of payable duties depends on the item itself.

For instance, liquor containing more than 30% of alcohol by volume is subject to 100% duty rate, whereas liquors and wine with under 30% alcohol content have no duties levied. 

Are there any prohibited or restricted imports?

The Hong Kong Special Administrative Region (HKSAR) is governed by laws that dictate what can be imported and exported. There are several goods that are prohibited or restricted from being imported into Hong Kong. Prohibited and restricted items include firearms, fireworks, explosives, psychotropic substances, controlled chemicals, animals (especially endangered species), dangerous drugs, rough gems and certain types of food and drinks (like meat, poultry, eggs, and powdered formula).

It is important to be aware of the prohibited or restricted items from being imported into Hong Kong, as businesses that import these items can face fines or even imprisonment. Importers may face prosecution without a permit or a valid licence for the items they want to bring into the country. There are penalty charges that vary depending on the items found in possession. For example, importing prohibited items without a licence can lead to fines of up to $500,000 and 2 years imprisonment. 

Rather than risk severe penalties, it is best to avoid exporting controlled items and ensure your goods from Malaysia comply with Hong Kong’s import regulations.  

How do I pay taxes and duties?

The amount of Hong Kong customs tariff and duty tax payable on imported goods must be paid before the goods are released from customs. Malaysian businesses that import goods into Hong Kong can pay the taxes and duties in a number of ways, including by cash, cheque, or credit card. In some cases, businesses may also be able to pay the taxes and duties online.

Apart from payment, documents that are needed for successful customs clearance include:

1. Manifests: Documentation that lists the cargo, passengers, and crew of a ship, aircraft, or vehicle.

2. Import/export licences or removal permits

3. Copy of detention notice: Documentation for the occasion that goods have been detained by customs.

4. Other supporting documents: These include invoices, bills of lading, airway bills, invoices, packing lists, amongst others

Apart from fully understanding customs charges and duty rates, partnering with a reliable shipping partner can go a long way in ensuring smooth delivery of your goods. Trusted delivery service providers may offer business solutions that expedite customs clearance and make overseas shipping a hassle-free process. Open an account with us today.