Customs Duty & Import Tax: Who Pays?

1. Core Question: Who Pays?

It depends on the Incoterms (trade terms) you agree with the factory. For most cases (FOB/CIF/DAP):
  • Only when using DDP (Delivered Duty Paid) terms will the factory (MS Makeup) cover these costs.
  • You (the brand/buyer) pay customs duty, import VAT, and clearance fees.

2. Key Terms (Simplified)

  • Customs Duty: Tax on imported goods (based on product value/quantity).
  • Import VAT: Added tax for import (required by most countries).
  • IOR (Importer of Record): Usually you (the brand)—legally responsible for tax payments.

3. Quick Rule

No DDP = You pay. DDP = Factory pays. Keep Incoterms consistent, and you’ll avoid extra costs.
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