In import and export operations, customs declaration is always considered the “hot spot” where risks are most likely to arise. Even a small error on the declaration form can cause a shipment to be held up at the port, resulting in huge demurrage/storage costs (DEM/DET), or even heavy administrative penalties.
Here are five common mistakes businesses often make and how to avoid them.
1. Applying the wrong Harmonized System (HS) code.
This is a classic and most serious error. The HS code determines the tax rate that a business must pay.
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Consequences: If a tax code with a lower tax rate than prescribed is applied, the business will be charged with tax fraud. Conversely, applying a higher tax code will increase the cost of capital.
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Advice: Don’t rely solely on the product name. Based on the product’s characteristics, composition, and intended use, apply the code according to the six general rules of the IMO.
2. Incorrect declaration of customs value (Invoice price)
Many businesses often make mistakes when declaring the value of goods, especially forgetting to include related costs such as royalties, international shipping fees, or insurance fees (for Group E and F conditions).
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Consequences: The declared value is rejected, and a price consultation is required, leading to prolonged delays in customs clearance.
3. Confusion between different types of imports
The Vietnamese customs system has many different types of import codes (for example: A11 – Import for consumer business, A12 – Import for manufacturing business, E21 – Import of raw materials for processing…).
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Consequences: Choosing the wrong type code makes it difficult to amend the tax return and affects the year-end tax settlement with the tax authorities.
4. Discrepancies in information between documents (Inconsistency)
The information on the invoice, packing list, and bill of lading does not match. For example, the invoice shows 100 packages, but the bill of lading shows 105 packages.
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Consequences: Customs will suspect the authenticity of the shipment and request a physical inspection (Red Channel), resulting in costly inspection fees and manpower.
5. Lack of specialized licenses or quality control certifications.
Many goods require permits from relevant ministries and agencies (Health, Industry and Trade, Animal and Plant Quarantine, etc.) before customs clearance.
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Consequences: Goods arriving at the port without the necessary permits will be stored indefinitely or forced to be re-exported, causing enormous losses for businesses.
Searoad’s solution: How do we protect your shipment?
To avoid the headaches associated with the aforementioned errors, Searoad’s Customs Clearance service provides complete peace of mind for our valued customers:
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Two-tier document review: A team of experts thoroughly checks the set of documents before submitting the official declaration.
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Optimal HS code consultation: Based on actual customs data, we apply the most accurate and beneficial HS code for your business.
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Rapid incident resolution: With our extensive network and on-site experience at ports (Hai Phong, Cat Lai, Da Nang, etc.), we handle any arising situations immediately on-site.
