China import tax when sending your own parts to china for PCBA

[Psi]

Just wondering how the china import tax works when sending your own parts into china for PCBA from somewhere outside of china.
Do I just have to eat that cost? Is there a way to avoid it legally since the parts are for re-export out of china?


There is also the issue of local tax when importing the parts (before sending them to china). Then getting taxed again on the import of the finished PCBA.  But as a company I can claim that back. So i'm really only asking about the china import side of things.

[tonyget]

NewZealand is RECP member，so I suppose there is no import tariff from NZ to China

[Psi]

There's no tarrif but I was charged $206.23 china duty and import tax by DHL on a $1200 parts shipment from NZ to china PCB house.
So I'm just wondering if this ~16% is normal or if I'm doing something wrong. (Not filing the righty paperwork etc..)
This $206 is not really an issue, it was only a small shipment and the first time i've tried sending my own parts to china so it was kind of a test to see how it works.
But if i'm shipping $10,000 of PCBA parts to china in the future i'd like to do it as cheaply as possible

I used the DHL option to prepay the destination import tax myself when shipping because I figured if I let the PCB house pay it and then charge me they would add their own markup on top.

I know I could lie on the customs value form, since china always does that for stuff they send to us.
But that has its own issues, not just that it's illegal but if I'm shipping $10,000 worth of parts I would definitely want shipping insurance on the package and that wont work if the shipment value is incorrect and i need to make a claim.

[jeremy]

I don’t know if it is reasonable, but I have been told firsthand that one of the reasons that aliexpress sellers do not request item returns is that the customs fees are often are more than the profit margin.

I sent a package of about $500AUD value to China a few years ago and was charged $50USD import tax in China. So your numbers seem about right.

[jonovid]

A westan reality check, China and her big neighbour, can really ruin your day.

[Mangozac]

Just to note: Even though NZ has a free trade agreement, that will only apply to items manufactured in NZ, so import tariff/duty can still apply based on where the components you're sending are originally from.

There are other import taxes that the Chinese government imposes but if the receiver is correctly registered they should be able to avoid them. From what I've seen, many small assembly houses don't have such registration because they generally just source everything domestically and are thus only exporting. Plus, I believe the registration process isn't a trivial task. Check with the receiver if they are import registered.

DHL will have a standard charge for processing customs no matter the package value - there's no way out of that. Here in Australia it's somewhere around 88AUD for value less thank $10k I think.

[Kean]

As Mangozac mentions, the larger assembly houses can be registered to have a "bonded warehouse" so they can receive imported goods that will be re-exported within a certain time.

Even if they have that in place to avoid duties, there is likely lots of paperwork on their side.  So it often won't work for goods they are not procuring themselves.

Also, I've had at least one situation where the components and bare PCBs had to be shipped to me un-assembled as the order was put on hold for "business reasons" and the customs paperwork expired. 

[free_electron]

Order your parts using digikey CHINA and have them delivered directly to your assembler.
There is a mechanism where you can declare the parts are for usage outside of china. But it believe the assembly must be "finished" outside of china. In the sense : you cannot have the product made in china and sold as a finished product. It must be a subassembly. again, don't quote me on that, but there is a way to do it without paying the taxes.

[daisizhou]

I am in China,Tariffs need to see how much value of goods you are transporting,And is it personal or commercial?
Personal tariffs are very cheap

[tonyjacksonw]

I had experience before. I would discuss with my Chinese manufacturer what the value on the invoice should be before sending the components. This reduces import taxes.

[tszaboo]

You should ask this question from your accountant and not the engineer.

[janoc]

I would expect that when you are importing components for assembly there shouldn't be a tax - assuming the finished components will be exported again and not sold on the Chinese market.

However, that may require some special paperwork - temporary import declaration or something of that kind. Also many of the factories are in the free trade zones for this specific reason.

The fab should be able to tell you how to deal with this and what paperwork may need to be supplied.

[gtwera]

We had the same issue in the company.
We sent some parts to China for assembly and we had to pay Chinese VAT (and some other fees) for import.

Small fees or import duty are OK, but the strange thing was that the assembly company even wanted us to pay for import VAT amount.
When we sent them information that they can get back VAT from the government they just said that they couldn't.

Link to VAT Refund (setting direct link doesn't work?!)

For us it really is a show stopper if we have to pay ~16% VAT on parts that we ship to China just for assembly and then ship final product back to Europe.

When asking a couple different companies we do business with we got many different replies ranging from: 1)Yes 2) No 3) Minimum amount needed 4) Import License required - we not have 5) Other kind of evasive response

It would be good if any of the members here doing business in China could shed some light on the actual import VAT situation.
Maybe also recommend PCBA companies who do not charge import VAT.

[mon2]

Why the double standard ?? What does China do when they send product to you ? What do they declare on the many widgets off Aliexpress / Alibaba on their invoices?

Wedding gift ? 10cents to the dollar ??

Respectively I know with 100% confidence that we have paid a premium to import parts from China into our country, paid for shipping raw materials back to China, then we have to pay again to ship the goods into China so their own locals can stay employed -> apply PCBA labor and then back to us so we can pay once again for the return of the goods ?

Someone has to be smoking the funny looking small cigarettes if they believe this will be the reality.

What has worked, most of the time, is to BUY and drop ship the goods to your CM in China - if this is possible to do. Openly we have been seriously burnt by the parts supplier (ordered DB9M with special 4-40 nuts to secure) -> they shipped in packing the DB9F without nuts -> the CM accepted as good materials -> built a few hundred of the PCBAs and shipped them to us. In our opinion BOTH the parts and CM failed us on their QC. The CM claims, 'we picked the parts' so they do not challenge the decision. That is a serious ISO failure for THEM to not inspect the goods upon arrival.

Needless to say, after receiving the wrong builds - we had a soldering party for 4-5 working days to rework the boards. In this case, where is the savings

We have our own operational SMT line and have a more serious focus to build the PCBAs in house. The CM offered to do the project turnkey - I am sure they would love that...some for me and some for them? Have seen it all before, not our first rodeo.

Case in point: The 'pocket fisherman' - was a local invention - the inventor came to our shop and was crying the blues. He demonstrated the product to one of the 'as seen on TV' hustlers and they ran with it to Asia to clone without the proper paperwork in place to protect the inventor. Rest is history.

The CM also wanted to source many of the parts but was never clear on the BOM, per item costings. Always a lump sum. We extracted that a $.08 device from Diodes was $0.80-$1.00 USD on the BOM - 'covid pricing'.

I will stop complaining and go check my BP....