We increasingly encounter the same problem: a shipper in China offers to handle the buyer’s entire logistics chain from A to Z and quotes a very low transport price.
However, once the cargo reaches Lithuania, the consignee often faces additional local charges, customs formalities and delivery costs that were not clearly stated in the original offer.
When planning freight from China, it is therefore important to assess not only the freight rate but the entire logistics chain through to the final consignee.
A real client example
One client purchased a boat from China for EUR 3,500. The shipper additionally offered sea transport to Klaipėda for EUR 400 and stated that the cargo would be delivered to the client’s door.
Once the cargo arrived, however, it became clear that some costs had not been included in the original offer:
- local charges – EUR 1,600;
- import charges – approximately EUR 1,200;
- door delivery – EUR 300.
What would the transport have looked like if planned in advance?
If the client had planned the shipment from China with TLC from the outset, the transport chain and expected costs would have been assessed before dispatch.
Based on the calculations for this specific case:
- transport – approximately EUR 500;
- customs brokerage and delivery – approximately EUR 300;
- the possibility of deducting import VAT would also have been assessed, provided the client met the conditions for VAT deduction.
It is important to distinguish customs duty from import VAT. VAT registration does not in itself eliminate customs duty, but in certain cases a VAT-registered business may deduct import VAT where the imported goods are used for VAT-taxable activities.
Customs duty and import VAT should not be treated as one charge
Import charges depend on the specific goods, customs value, origin, TARIC code and other circumstances. Before booking transport, it is therefore worth checking in advance which charges will apply to your particular goods.
Lithuanian Customs states that customs duties and national taxes applicable to imported goods can be checked by commodity code in the LITAR system: Lithuanian Customs LITAR information.
If the importer is VAT-registered and the goods are used for VAT-taxable activities, the possibility of deducting import VAT is assessed under VAT rules. This is not the same as reducing customs duty.
How much could be saved?
In this particular client example, the difference between unplanned costs and a logistics chain assessed in advance could have been around EUR 1,500–2,600, depending on the final amount of import charges and the possibility of deducting import VAT.
The most important point is not the amount saved itself, but that the client would have known all the main costs before deciding on the transport arrangement.
What should you check before accepting the shipper's offer?
Before entrusting a shipment from China to the shipper, request a detailed estimate of all costs and clarify exactly what is included in the offer.
- Who pays the local charges at the destination port?
- Is customs brokerage included in the price?
- Who calculates and pays import duty and VAT?
- Is delivery from the port to the final address really included?
- Which Incoterms rules apply to the transaction?
If you want to estimate all expected costs before dispatching your cargo, contact our team – info@tlclogistics.lt.
