Import Duty from China to Australia: The Complete Guide

Import Duty from China to Australia: The Complete Guide

February 2, 2023

Dropshipping from China to Australia has become a thriving business. But, getting across customs can be challenging if you are unaware of the import duty from China to Australia. Here is a brief guide about duties and regulations regarding dropshipping from China to Australia.

Import Documents China to Australia

Import documents are the most important element of sending products to Australia. To bring your products safely to Australia, it is better that you have all the necessary documents. Let’s have a look at the vital import documents for importing goods.

Certificate of Origin

A Certificate of Origin or COO is a certificate that shows the origin of production and delivery of your goods. It enables customs to better understand the country or region of origin to determine any specific import rules (if). One major reason for a Certificate of Origin is that the import tax from China to Australia may differ from a few others.

But do you know about ChAFTA?

ChAFTA is a free trade agreement between China and Australia, known as the China–Australia Free Trade Agreement. Using a ChAFTA COO, importers in Australia can be exempt from the tariffs that they may have to pay otherwise. You can learn more about ChAFTA at the Australian Government Department of Foreign Affairs and Trade.

Invoice

The invoice is the main proof of the products you send to Australia. It contains all the details of the items and the export transaction. It may also include information about the importer and the exporter. A complete commercial invoice must have the value, weight, and quantity of goods. It should also have information like the importer and exporter identities, payment terms, HS codes, and the total value of the package. The invoice containing all shipment details allows you to come clean and saves you from further issues.

Packaging/ Shipment List

The next document you need is a packaging or shipment list besides understanding import duty from China. It acts as a checklist for the exporter and customs to make sure that the shipment has been properly packed. A complete packaging list must have details of the quantity, measurements, and weight of the parcel beside the description. It may also mention the type of packaging and packaging material used. In case your invoice does not have the importer and exporter details, it is important to put them on the packaging list. Remember to add any other relevant shipment details with the parcels.

Import Declaration

Like the details given by the exporters, the importers also need to provide documents. Import declarations are such documents required by the customers. When sending goods to Australia, the importer has to fill out an import declaration regarding the package. It also contains information similar to the packaging list but on the exporter’s side.

The declaration details the imported goods, importer, customs value, transportation method, and tariff classification. The import declarations may be of SAC or N10

  • SAC (Self-assessed clearance) applies to import packages of less than AUD 1,000
  • N10 import declaration relates to imports valued at more than AUD 1,000

Thus, you only have to provide the import declaration relevant to the Australia import tax from China.‍

Import Duty from China to Australia

Customs charges and import duties are considered critical in dropshipping. If you do not know the customs charges of a particular region, it can increase the overall cost of your shipment. So, it is recommended to understand Import duty from China first.

Before we tell you about the different types of taxes and duties in detail, look at the taxable importation charges.

Taxable importation is a sum of:

  • Customs duty
  • Customs value of the shipment
  • Insurance and transportation costs

Here are all the different duties, taxes, and charges you might have to pay at customs:

Customs Duty

Sending post-border shipments anywhere in the world asks for customs import duties. Importers have to pay import duties from China to USA, UK, Australia, Malaysia, Germany, and all others.

Usually, each shipment entering Australia has to pay up to 10% customs duty. Shipments from China typically pay a 5% tax on their customs value. Find out the product’s HS Code to find the exact custom duty rate. Refer to this document or contact the manufacturer to understand the HS code and calculate the customs duty rate.

Processing Charges

The Australian Border Force charges a standard processing charge on each important shipment. The charges typically depend on the customs value of your shipment comprising the total value of all items. The import processing charges (IPC) also vary according to the custom value charges below and above AUD 10,000.

Custom ValueManual Submission IPCElectronic Submission IPC
AUD1,000 – AUD10,000AUD 90AUD 50
AUD1,000 – AUD10,000AUD 192AUD 152

 

GST

Goods and Services Tax, also known as GST, applies to a major fraction of products imported to Australia. All importers have to pay GST whether they are GST-registered or not.

China Import Duty Calculator to Australia

We have put together a sample calculation of duty and tax costs between China and Australia.

Tax TypeCalculationTotal
Customs10,00010,000
Import Duty5% x 10,000500
Insurance Cost2020
GST10% x (customs total, import duty, insurance cost, shipping cost)1,152
Import Processing Cost Electronic152152
Shipping Cost1,0001,000
Total12824

 

Cost of Importing Goods – Australian Government

The Australian government has provided details about the import laws into the country and the Australia import tax from China. They also mention the concessions and refunds if possible. Some of the important mentions by the Australian Government Department of Foreign Affairs and Trade include:

  • Exchange Rates
  • The customs values of the goods entering Australia must be expressed in AUD (Australian currency).
  • GST

All importers must pay Goods and Services Tax (GST) on import unless the shipment is exempted. Find out about Wine Equalization Tax, Luxury Car Tax and other forms of GST at the Department of Foreign Affairs website.

Refunds and Concession

Some shipments may be able to claim a Custom duty refund or exemption from customs import duty. You may also be able to avail of concession schemes if you are an Australian manufacturer. Check the details thoroughly here.

Types of Goods to Import from China

Dropshipping from China to Australia may include all different types of products. But, every item is not the right choice. Thus, it is important to find out what you want to import. Understanding your niche will allow you to pick the best products to import. You can also check if Australian customs allow those products. Let’s tell you a few elements to keep in mind when picking products to import from China to Australia.

Pick Hard-to-Find Products

One common mistake drop shippers make is that they only follow trends. The trends fade away in a few months and their sales drop. Thus, the best choice is to pick unique products. Most people opt for online shopping for products they cannot find nearby. Choose goods that are not readily available.

Import Niche Products

Drop shippers often hunt and choose products that do not necessarily match their niche. They think of adjusting the niche according to the products. Yet, it is not the right approach. Find the target market first and the demand for the items. You cannot necessarily create a demand once you have the product.

Avoid Food Items

It is better to avoid food items as they might go bad during transit. Another reason is that Australian law is strict about animals and plants. Thus, it might cost you a lot and you might not make good profits on the products. Choose products with high demand and good profit margins.

Safety Regulation Permits

If you do not know about the safety regulations, it is better to study the standards. They provide you with information about special documentation for specific goods besides import duty from China to Australia. Some of the items that require special documentation for safety regulation include:

  • Food
  • Health products
  • Cosmetic items
  • Toys
  • Smoking accessories
  • Bicycles
  • Furniture

The regulatory body of AS/ NZS regulates the products according to a set of standards. Every product must comply with these regulations to be sold in Australia. They take care of all factors like material testing, industrial safety, and performance requirements.

You can look for regulations that apply to the products you want to import. Talk to the manufacturer to make sure your products comply with all regulations.

If you do not comply with the import duties and regulations in Australia, they might recall your product from the market. You may also face heavy fines, or the customs can confiscate the products at entry if needed.

Prohibited Products

The Australian government has strict rules against a few prohibited products. You cannot bring these items to the Australian border. Importing these products may subject you to fines. Customs also has the authority to confiscate these items.

Some prohibited products include heritage items, steroids, drugs, protected wildlife, plants and animals, and firearms.

Labelling Requirements

Besides import tax from China to Australia, it is critical to consider the labelling requirements.

The label on your shipment must contain all the details about the importer, exporter, production, packaging, and any other information necessary. It must be in English to be easily understood by Australian customs. The labelling must contain an accurate description of the goods in the shipment. Yet, all import packages do not require labelling. Failing to give proper details about the shipment can lead to confiscation of the shipment by customs.

Importers need to take care of the following labelling requirements:

  • AS/NZS labelling requirements according to the products
  • Country of origin
  • Ingredients labelled for cosmetics and a few other products
  • RCM marking
  • Care labelling, if needed

Shipment Options from China to Australia

Importers choose different shipment options for dropshipping from China to Australia, including sea and air freight. Here’s a quick look into both of them:

Air Freight

Air Freight is a suitable option for shipments under 100 kgs with a volume of less than 2 cubic meters. Most drop shippers prefer air freight when they need to deliver the products within a short period. The usual time taken for delivery by air between China and Australia is 5 to 7 days.

Sea Freight

Sea freight is considered the best choice among most importers for importing goods as it reduces overall costs. It takes around 12 days for the shipments to reach Australia from China. Sometimes, it may take more time. But, if you offer a two to three weeks estimated delivery time like most shippers, you do not have to worry about it.

Fulfilment Centers

With changing times, the dependency on fulfilment centres is increasing. Most Australian drop shippers prefer fulfilment centres and dropshipping agents for these tasks. It allows them to deliver products from China to all parts of the world. They may also help you calculate the import duty from Chinaand other regions if needed. However, it is suggested to import the product to Australia directly for local selling.

Conclusion

Dropshipping to Australia can be a problem if you do not know the import duty from China to Australia. This article has covered everything from different taxes and import duties to the rules and prohibited products. We hope this article helped you understand dropshipping from China to Australia better. Let us know if you have any questions, and we will make sure to answer all your queries!

FAQs

Is there import tax from China to Australia?

Australian customs charges Customs Duty as a percentage of the total Customs Value. It varies between 0% – 10%. The Australia import tax from China is usually 5% of the Customs Value.

How much does it cost to import from China to Australia?

The total cost for import to Australia is calculated by adding all the costs. The most important value is the Customs Value that helps customs find Customs Duty. It is typically 5% for items from china. Other costs include insurance, shipping, import processing, and GST. The goods and services tax (GST) is calculated by adding import duty, customs total, insurance, and shipping cost. Customs commonly charge 10% of the total amount.

What is the cheapest way to ship things from China?

Sea freight is considered a cheap and reliable way to send items from China. One drawback is that reaching Australia may take a few additional days. Another choice is to use express freight to send items quickly. It charges $5 per kilo for small packages and shipments up to 150 kg.

shailesh is a Design Founder & Advisor, Berlin School of Creative Leadership Executive MBA participant, Zippie advisor, Wolt co-founder, and Nordic Rose stakeholder.

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