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Tax and Duty Considerations in the Latin American Market

While Latin America presents a huge growth opportunity in the ecommerce industry, U.S. online retailers need to take into account several considerations when shipping merchandise to the region.  Many countries in this area have strict regulations on imports, which affects the way companies formulate a shipping strategy to these countries.

As an online retailer selling to customers in this market, a simple and straightforward purchasing transaction for the buyer is important, as is calculating the correct amount of duties and taxes so the customer knows exactly what to expect in terms of what their actual total costs will be.

Tax and Duty

Customs and tax requirements differ by country so it is important that online retailers know and understand the regulations for each market they are selling to within Latin America.

For example, several Latin American countries, such as Argentina and Brazil, have high tariffs on imports.  American online retailers need to factor the total tax amount to make sure their merchandise is still affordable for those consumers.  In some cases, taxes and fees can double the cost of the product, particularly in Brazil which imparts additional fees on imported products in industries they want to protect.

Calculation of Duties and Taxes

Equally important as understanding customs and tax regulations, is calculating the correct amount for the buyer.  Most international shipments are subject to duties and taxes imposed by the importing country.  The items being shipped must have the proper declared value, to avoid incorrectly calculated duties and taxes that can delay a delivery or cause a seller to lose a sale altogether.

The amount of duties and taxes are based on the product value and how it is categorized in customs.  For most countries in Latin America customs works with a simplified tax regime for e-commerce shipments.  HS Codes are only required for commercial imports.

Correct Documentation for Shipping

Each country also has different requirements for shipping documentation.  For those merchants that utilize e-invoicing, most of Latin America has stringent mandates that require an accompanying bill of lading.  Many countries are now insisting that a PDF document follows all shipments and sometimes an electronic bill of lading to accompany the e-invoice as well.

The declared value of goods is part of this documentation so if this part of the process is not managed correctly, delivery trucks carrying merchandise may sit for days, or buyers may be forced to refuse shipments.

These measures are put in place so that all purchase orders and goods received match, and are charged the appropriate taxes.  Not having the proper documentation for tax purposes can cause shipment delays, lost merchandise, chargebacks, and refusals.

For retailers looking to outsource duty and tax collection, SkyPostal is the expert on international shipments.  Customers will pay the amount of duties and taxes owed securely and conveniently, before the package is shipped.  Our Secure Import solution eliminates the hassle and confusion associated with calculating these cost, making for a better customer experience.

To find out how SkyPostal can address the complex customs issues of each country for your business, visit our website at www.skypostal.com.