Yes, DHL Airfreight Forwarder will be performing customs clearance for all shipments imported into Malaysia using the DHL Express network
No, an importer does not need to appoint DHL as a Clearance Agent as it is not required by RMCD (Royal Malaysian Customs Department) for Express Courier Companies.
Customs clearance process will start when we (DHL Express at Destination Country) receive the invoice and other relevant document image from DHL Express at the origin country.
In order to perform customs clearance, a full set of complete invoice and the air waybill are required. If the item shipped is a controlled/restricted or prohibited, additional permit/license may be required by the authority
In Malaysia, shipment will only be cleared and released once all payment of duties and taxes have been paid. A shipment may be released by Customs before shipment arrival. Otherwise, if there are any issues with the shipment and documentation, shipment release may take 24 till 48 hours after shipment arrival
Yes, this is allowed by Customs. Shipments which are controlled and restricted may require clearance to be completed after arrival as there may be customs examination required and additional documentation needed from the importer
|Customs Form No 1 (K1)||Importation into Malaysia to a Principal Customs Area|
|Customs Form No 2|
|Exportation from Malaysia to Overseas|
|Customs Form No 3|
|Movement from Peninsular Malaysia to East Malaysia or vice versa|
|Customs Form No 8|
|Bonded Movement of Dutiable and Non Dutiable Shipments in Malaysia|
Yes, importation of shipments may attract duties or taxes or both
|IMPORT DUTIES||EXCISE DUTIES||SALES TAX (SST)|
|• Import Duties are imposed to shipments based on the items (0% – 30%)||• Excise Duties are imposed on controlled items defined by RMCD||• SST is imposed on all imported shipments|
|• Calculated based on the CIF value of the shipment||• Cigarettes, tobacco, alcohol, spirit, liquor, gambling equipment, vehicles||• 5% or 10% unless item is listed as Non Taxable Goods or the importer has exemption under Person Exempted from Payment of Tax Order|
|• Duties are exempted if importer is in bonded area, designated area, Licensed Manufacturing Warehouse||• SST is not chargeable if shipment is moved to a Special Area/Bonded Area|
Yes for non-controlled and non-restricted items with a CIF value of below RM500, no duties and taxes will be imposed. This is referred to as a de minimis value.
De minimis shipments are also known as Direct Release shipments
De minimis shipments are when imported shipments do not attract any duties and taxes due to its CIF value of below RM500. Having said that, shipments must still be declared from customs using a simplified format with lesser data elements than formal clearance
In Malaysia it is known as a K4 manifest which provides consolidated information of the shipments arriving into Malaysia.
However, any items under the Customs (Prohibition of Imports) Order 2017 must not be declared as a de minimis shipment regardless of its value.
Under Malaysian Law stated in the Customs (Prohibition of Import) Order 2017, there are Absolute Prohibition and Conditional Prohibition. You may refer to Order as per Appendix 1 for the full list. Below is a guide for items related to DHLE.
Absolute Prohibition – The importation of the items into Malaysia is absolutely prohibited
• Any items sensitive to any religion, belief in Malaysia or may disrupt the peace and harmony of the country
• Pornographic Material items include but not limited to sex toys, sex dolls, illicit prints such as books, magazines, digital print and paintings etc
Conditional Prohibition – The importation of the items into Malaysia is allowed with an import license or in the manner provided by the Order
• Pharmaceutical Items such as Cosmetics, Vitamins, Supplements, Perfume, Skincare Products
• Cigarettes, Tobacco and any items containing Nicotine
• Wine, Liquor, Beer and Spirit as well as apparatus for home brewing
• Any items originating from Israel
• Any foodstuff and beverages for commercial purposes consumed by either human or animals
• Any form of Animal Skins
• Birds Nest
• Wood or any wooden products
• Telecommunication product
• Rubber Products such as tires
• Used/ Scrap electronic items including laptops and mobile phones
• Plants listed under the CITES Convention (Convention on International Trade in Endangered Species of Wild Fauna and Flora)
An importer may apply for a permit or license for importation directly to the Government Agencies or through an agent. The designated Government Agencies may be referred to the Customs (Prohibition of Import) Order 2017 Column 5 of each Schedule.
DHL Express does not perform any permit application on behalf of the importer. It is advisable for the permit approval to be obtained prior to shipment arrival into Malaysia
For shipments cleared by DHL Express Malaysia, we will be paying the duties and taxes incurred on behalf of the importer. Duty Invoice will be issued to the importer.
If the amount of duties and tax is above RM25, there is a disbursement fee (3% of duties and tax or RM50 whichever is higher) charge for DHL to pay upfront on the duties and tax incurred for the clearance of the shipment.
If the duties and tax incurred exceeds RM500, DHL Express will attempt to contact the importer prior to customs clearance.
If the duties and tax incurred is below RM500, we will proceed with customs clearance to expedite the delivery of your shipment. Any disputes regarding the clearance will be reviewed on a case by case basis by the DHL team
If a customer requires DHL Express to contact customer regardless of duty and tax amount, a Duty Confirmation Fee of RM50 per shipment will be charged per shipment.
• Item requires permit from a government agency
• Pending clearance approval from Importer
• Pending duty and tax payment confirmation by Importer
• Item requires physical examination by Customs or Other Government Agencies
• Valuation Related Issue – Item Value is not agreeable by Customs, may require Proof of Purchase from Importer
• Classification Issue – Customs is not agreeable with the item classification, may require catalogue or technical information of the item
• Insufficient Invoice provided during pick up at origin
• Temporary Import and Repair and Return Shipments require Physical Examination by Customs
• Expired Exemption
• Duties and Taxes exceed RM5000 – requires a direct cheque/payment by importer
• Shipment is confiscated by Customs or Other Government Agencies
Duty and Tax Drawback must be done by the importer and DHL does not perform the drawback process.
DHL is only able to assist for the Duty and Tax Calculation and provide that information to importer if they wish to perform a duty drawback.
In reference to Free Zone Act 1990 “Free Zone” means any part of Malaysia declared to a Free Commercial Zone or a Free Industrial Zone.
Free Commercial Zone
A Free Zone is designated area to perform commercial activities that include trading (excluding retail trade), breaking bulk, grading, repacking, relabeling and transit.
Free Industrial Zone
A Free Zone is a gazette area meant for manufacturing activities.
Payment of duties and taxes for goods brought into or placed in the Free Zones are not required. However, a declaration of entrance and exit must be performed by the clearance agents
Documents required: Complete Set of Invoice, Waybill Number and any related exemption if applicable
It is the responsibility of the companies that are situated in the Free Zones to have a document control process with regards to shipment movement. DHL Express will only provide the copy of the Invoice, Waybill and the Declaration Form to the companies during shipment delivery
|Overseas Import into FZ||K8|
|Domestic FZ to FZ||K8||Declaration is not done by DHLE|
|PCA to FZ||K2|
|FZ to PCA||K1|
|FZ to Bonded Warehouse||K8|
|FZ to LMW||K1|
|LMW to FZ||K2|
|FZ to Overseas||K2|
Licensed Manufacturing Warehouse is established under the provision of section 65/65A of the Customs Act 1967. An LMW is granted to any person for warehousing and manufacturing approved products on the same premise. It is primarily intended to cater for export oriented industries.
Customs duty exemption is given to all raw materials and components used directly in the manufacturing process of approved produce from the initial stage of manufacturing until the finished product is finally packed ready for export.
The LMW holder must provide DHL Express with the below documents prior to importation
• LMW License
• LMW Exemption List and Approval
The approval is given by the Industrial Department of RMCD for importation of raw materials, packaging, machinery and tools as well as return shipments due to various reasons.
|Overseas Import into LMW||K1|
|Domestic into LMW||K9||Declaration is not done by DHLE|
|LMW to PCA (Domestic)||K9||Declaration is not done by DHLE|
|LMW to Bonded Warehouse||K2|
|FZ to LMW||K1|
|LMW to FZ||K2|
|LMW to Overseas||K2|
It is the responsibility of the companies that are situated in the LMW to have a document control process with regards to shipment movement. DHL Express will only provide the copy of the Invoice, Waybill and the Declaration Form to the companies during shipment delivery
Temporary Import is a facility for the temporary importation of goods without payment of customs duty/tax with a security being given to the satisfaction of the Director General of Customs and with a view to subsequent re-exportation in consistent with the provision of Section 97 Customs Act 1967. Temporary Import is stipulated with specific conditions set by RMCD
Acceptable duration is 3months from the date of import. However, any extension (up to 12 months) needs to be applied prior to the deadline
If any disposal or sale is done in the country, consent must be applied through RMCD.
In the event the items are not returned back within the approved period, the supposed duties and taxes must be paid at the importing station.
For items to be temporarily imported into Malaysia, the process must be initiated prior to importation. Failure to obtain the proper approval before doing so, will risk importers having to pay the duties and taxes for the importation
• Bank Guarantee Letter
• Temporary Import Approval from Customs
• Commercial Invoice
• Air Waybill
ATA Carnet is an internationally recognized customs document which allows a shipment to move from one country to another tax and duty free. These shipments must return back to its origin country within 1 year of travelling. Items shipped may be Commercial Samples, Professional Equipment for Movies and Events or Goods for Fair and Exhibitions.
Temporary Import and Export is applicable from one country to one country. Whereas for ATA Carnet the goods may be travelling from various countries entering and exiting during the duration of the Carnet. Think Formula One Race Season, Concert Tours, Documentary Filming.
The Carnet will be traveling together with the shipment. Upon entering a country, the customs officer will stamp on the counterfoil and remove a voucher from the set. The same process will need to be done for the goods exiting the country.
The shipment will require a physical inspection by customs.
Once inspection is done, the ATA Carnet counterfoil and remaining voucher (certificate sets) will be attached back to the shipment.
It is the responsibility of the companies (importers/exporters) to have a document control process with regards to shipment movement. DHL Express will only provide the copy of the Invoice, Waybill and other supporting documents (if applicable such as declaration form or custom of receipt) to the companies during shipment delivery.
These is as per the Customs Guidance and Customs has the authority to seek for more documents
• Air Waybill
• Customs Official Receipt (where applicable)
• Customs Declaration Form
• Permits and Licenses (where applicable)
• Proof of Payment
Electronic copies are acceptable, however, during Customs audit, if there is any suspicion or potential fraud, a company must be able to retrieve original form of the documents. All data and document retention must be located in Malaysia and special approval from RMCD is needed for it to be kept overseas
No, exportation of shipments does not attract duties or taxes or both. However, there is CESS payment chargeable for Rubber Products
Exporters need to be aware of customs regulation at the importing country in order to avoid clearance delay or worse confiscation of the item resulting into violation of the destination country’s law.
Before exporting out of Malaysia, exporters must be aware and read through the Customs (Prohibition of Export) Order 2017 to ensure that any items that require permit for export are being provided to DHL Express upon pick up. Common items that are under Conditional Prohibition are but not limited to
• Any items into Israel
• Birds Nest
• Rubber, Palm Oil, Plant and Animal Products
What are the documents needed for export declaration from Malaysia?
Export declaration requires invoice and waybill or any permit if shipment item is mentioned in the Customs (Prohibition of Export) Order 2017
DHL will provide the declaration within 7 days after exportation. Under the Customs Act 1967 Sect 87A, a shipment moving via Air to outside of Malaysia is allowed to be declared within 7 days after exportation.
This however does not apply to shipments from Johor and also Prohibited Items.
In Malaysia there is a law on Export Control which is referred to as Strategic Trade Act 2010. Under the Act, there is a list of items (STA Items) which requires a permit from Ministry of International Trade and Industry (MITI) prior to exportation. These items may be military items or items which are considered of dual use and may be used in the act of violence and terrorism.
DHL Express will be the one declaring to RMCD on the STA items based on the instruction of the exporter. The exporter is responsible to provide DHL Express the permit issued by MITI in order for the items to be declared in the K2 form as STA shipment.
Exporters must alert our Commercial or Customer Service team that the goods to be exported are governed under STA 2010.
The MITI permit, Invoice and Waybill must be provided upon pick up of the Item
The waybill filled up by the exporter must clearly state “STA Items” on the waybill
The shipment may have a delay of 1 day before uplift as the customs officer may require the shipments to be examined prior to export.
There will be penalties imposed by RMCD if an STA item with a permit was not declared prior to uplift.
If there is no form of declaration by the exporter, MITI and RMCD have the rights to proceed with legal action towards the exporter for not complying.
Incoterms is a short way of saying International Commercial Terms which is an agreement of trade tasks, risks and costs between the buyer and the seller.
Below diagram will help you understand the responsibility between the seller and the buyer. Bear in mind that incoterms also has specific mode of transport that it covers and also Incoterms such as DDU is being replaced by a new term in compliance to INCOTERMS 2010
Incoterms stated in the invoice is used for Customs Valuation Purposes. For importation into Malaysia, Cost Insurance and Freight (CIF) is being used.
Some customers may not have in depth knowledge of Incoterms or in certain situation the shipment is to be shipped by sea however due to urgency the mode of transportation is change at the last minute. FOB value is referred to by customs as the value agreed between buyer and seller as per item value stated in the invoice. This means that the value of Insurance and Freight has to be added in to determine the Customs Value.
If the shipping cost or freight value is stated in the invoice, will customs amend the value?
There is a possibility of above happening if the IATA TACT Rate value is higher than the stated freight value or the shipping cost stated is too low.
IATA TACT Rate is an annual shipping rates extracted from IATA TACT website to determine the shipping value based on the origin and weight of the shipment. This rate is agreed annually between Customs and the Express Companies in Malaysia in reference to the IATA TACT website. The rate table is updated at the back end of our DCE system and may only be shared to customers upon request.
Customs valuation is a customs procedure applied to determine the customs value of imported goods. Customs Value is determined using the Customs Valuation where transaction value (TV) is used. Transaction Value is to be based on the actual price of the goods to be valued, which is generally shown on the invoice. Malaysia uses CIF term to determine the Customs Value. Therefore the invoice value stated may have additional costs. The Customs Value is then used to determine the duties and tax calculation.
CIF VALUE = Total of Below [C+I+F]
C = Cost/Value in Invoice
I = Insurance
F = Freight as per IATA TACT Rate
IMPORT DUTY = CIF VALUE * IMPORT DUTY RATES
EXCISE DUTY = [CIF VALUE + IMPORT DUTY]*EXCISE DUTY RATES
SALES TAX = [CIF VALUE+IMPORT DUTY+EXCISE DUTY]*SALES TAX RATES
Shipments that go through cross border trading are required to be classified based on their product. The harmonized System (HS) Code at a 6 digit level is developed and maintained by World Customs Organization (WCO). It is then used to classify the products that are being imported or exported.
The HS Codes is then used to determine the duties and tax rates, control and restrictions as well as any rules of origin applicable to the country.
DHL will refer to the invoice provided for HS Code classification by the shipper. If there is no classification done, DHL will use the Malaysian Customs Duties Order to classify the items in the shipment to the best of our knowledge. DHL will classify the shipments using a 10 digit HS Code based on the Customs Duties Order 2017.
✓ Inform DHL Express if there are any changes to your company setup, address, person in charge and any changes on any clearance exemptions or restriction
✓ Regularly communicate with your overseas shipper to ensure all information and documentation provided is accurate
✓ Know the content of the items orders and the restrictions imposed by the Government of Malaysia
✓ Include the breakdown of freight and any discounts offered in shipment invoice
✓ Declare all items in the shipment including free gifts and additional samples
✓ Declare product details and description as specific as possible. Placing the Harmonized Code for the items in the shipment is strongly encouraged
✓ Ensure all required documents are kept as per the document retention requirement. Do Not wait for an audit to have a proper document control process in your company
✓ Use a pro forma invoice. Only Commercial Invoice or Invoice accepted for customs clearance purpose.
✓ Declare a nominal value of the item. There is no such thing a “Free” when it comes to the value of an item. Companies must practice acceptable valuation method
✓ Declare the port of loading as the country of origin. Goods must be declared based on the true origin or the actual origin where the manufacturing was performed
✓ Declare items differently from the actual shipment content