The pieces of an international shipping cost
An international shipment's full cost typically breaks into four pieces: the carrier's postage or freight charge, any import duty assessed by the destination country, any import tax (such as VAT or GST) assessed alongside or instead of duty, and a brokerage or customs-processing fee some carriers charge to handle the paperwork. Not every shipment triggers all four — low-value shipments under a country's de minimis threshold may avoid duty and tax entirely.
Who pays what, and when
This depends on the Incoterm you ship under. Under DDP (Delivered Duty Paid), the seller pays duties and taxes upfront as part of the shipping transaction, and the buyer receives the package with nothing additional to pay. Under DDU/DAP (Delivered at Place), the buyer pays duties, taxes, and often a brokerage fee directly to the carrier or customs agency before or at delivery — which can come as an unwelcome surprise if not clearly communicated at checkout.
Practical advice
- Set clear expectations at checkout about who pays duties, especially under DDU/DAP shipping.
- Check the destination country's current de minimis threshold before assuming duties will apply.
- Use accurate item descriptions and HS codes on every customs form to avoid delays (see our guide on avoiding customs delays).
- Factor brokerage fees into your total cost estimate — they're easy to overlook until a shipment is billed.
Common mistakes
- Assuming duty rules from one destination country apply to another.
- Underdeclaring item value to reduce duties — a customs and legal risk, not a savings strategy.
- Not communicating DDU/DAP terms clearly, leading to refused deliveries when a buyer is surprised by a duty bill.
FAQ
Can I estimate duties before shipping?
Many shipping platforms include a duty and tax estimation tool at checkout based on the item's category and destination — useful for setting expectations even though it's an estimate, not a guarantee.
Does the carrier keep the duty and tax money?
No — the carrier collects and remits duties and taxes to the destination country's customs authority, typically charging a separate brokerage fee for handling that process.
Related Reading
Sources
General guidance based on publicly available customs and carrier documentation, including U.S. Customs and Border Protection's import guidance, current as of publication. Duty rates, tax rules, and thresholds vary by country and change over time — confirm current rules with the destination country's customs authority.