How To Calculate Customs Duty and Shipping - Bahamas
The import cost of an item is based on the value of the item and its weight/dimensions. The cost can be broken down into two parts. Government Cost, which includes Customs Duty, VAT, and Processing Fees and Shipping (Courier) Cost, which includes Freight and Insurance. Let’s use a Television (TV) as an example.
Calculating Customs Duty
Item Value
The first thing we need to start our calculation is the value of the item. This is the amount you paid to purchase the item. In our TV example, the amount is $500. Let’s add it to our tracking table:
| Item | |
|---|---|
| Television Cost | $500 |
Actual Duty
The next amount we’ll need is the actual duty. It is the value of the item multiplied by the duty rate ($500 x 35%). Using the current duty rate for TVs (35%) gives us $175. Let’s add it to the table.
| Item | |
|---|---|
| Television Cost | $500 |
| Government Cost | |
| Actual Duty | $175 |
| Total | $675 |
Processing Fee
Now we’ll include the processing fee. For our TV, it will be $500 (value of TV) multiplied by 1% or $10, depending on which one is greater. Since $500 x 1% is $5, the processing fee will be $10.
| Item | |
|---|---|
| Television Cost | $500 |
| Government Cost | |
| Actual Duty | $175 |
| Processing Fee | $10 |
| Total | $685 |
Environmental Levy/Storage Fee
In addition to the customs duty rates that determine the actual duty, some imported items have an environmental levy fee and/or storage fee. Add these fees to the total if they are appliable. In our example, there is a $5 environmental fee for TVs.
| Item | |
|---|---|
| Television Cost | $500 |
| Government Cost | |
| Actual Duty | $175 |
| Processing Fee | $10 |
| Environmental Levy Fee | $5 |
| Total | $690 |
Calculating Shipping Cost
Our total so far is $690, but we’re not done yet! Next, we’ll include the shipping cost. These calculations depend on the shipping company you are using to import your item and aren’t related to the customs duty rates. In our example, the shipping company charges a flat rate of $2 a pound for Freight and Insurance of $1 per $100 in item value.
Freight
The freight cost is going to be the chargeable weight multiplied by the rate per pound. In our TV example, the chargeable weight of the TV is 20 pounds, giving us $2 x 20 ($40) as our freight cost.
| Item | |
|---|---|
| Television Cost | $500 |
| Government Cost | |
| Actual Duty | $175 |
| Processing Fee | $10 |
| Environmental Levy Fee | $5 |
| Shipping Cost | |
| Freight | $20 |
| Total | $710 |
Insurance
The insurance amount for our TV with a value of $500 is $5 ($500 divided by $100). Let’s add this amount before the final step.
| Item | |
|---|---|
| Television Cost | $500 |
| Government Cost | |
| Actual Duty | $175 |
| Processing Fee | $10 |
| Environmental Levy Fee | $5 |
| Shipping Cost | |
| Freight | $20 |
| Insurance | $5 |
| Total | $715 |
Calculating Value Added Tax (VAT)
The final cost we need to calculate is VAT. Just like the customs duty rates, it’s a percentage. It is another government cost, but we left it until the end because it depends on the government cost calculated so far and the shipping cost. It is the total cost calculated so far multiplied by the VAT rate. For the TV it is $85.80 ($715 x 10%).
| Item | |
|---|---|
| Television Cost | $500 |
| Government Cost | |
| Actual Duty | $175 |
| Processing Fee | $10 |
| Environmental Levy Fee | $5 |
| Shipping Cost | |
| Freight | $20 |
| Insurance | $5 |
| Total | $715 |
| VAT | $71.50 |
| Final Total | $786.50 |