The good news continues: your soap is sold in bar form. This is important, as liquids are prohibited items. Bar soap is unlikely to be found on lists of goods not allowed to be sent to certain markets (although you should be cautious if sending to Australia, which has a long list of restrictions to maintain agricultural quarantines). But then you face another serious and unexpected problem. There is a declaration form that needs to be filled out for the package. The requested information can include your sender IOSS number (for the EU) or the GST/VAT number of your recipient. The form asks for HS Codes and country of origin. You make soap. You have no idea what these questions even mean to you and you quickly have to find someone who can help. You might get incredibly lucky and find a post office staff person who can unravel these questions. Or not. In some markets, there are either written guides or help sheets built into the websites of the postal service. In some locations, there are government officials or business association staff who can provide some assistance. But in many instances, you are on your own to sort this out. If you get your information wrong, it can be a serious problem. Once the details are filled in, the package is ready for shipment. The costs shown on the invoice reflects the shipping charges and may need immediate payment. Flush with success, you prepare a second package. However, this time you are suddenly presented with a different set of bills. In addition to shipping charges, you are getting charged import duties and taxes. These import duties on soap could be as high as 25-40% and the taxes can easily be another 10%. Plus the customs forms are much more complicated.

Amazon’s move was in response to a decision by the Australian government to both impose a 10 percent tax on all imported goods into Australia and lower the de minimus threshold (DMT) for entry into the country from AU$1000 all the way to $0. The DMT is a government-imposed limit under which imports are exempted from taxes, import charges and most customs duties, and have a limited clearance processes and data requirements. A higher de minimus, in particular, can make it much easier for smaller firms to ship goods globally since most are not sending 40 foot containers anywhere, but small size packages. Under the new law, businesses located anywhere in the world that experience an Australian annual turnover of AU$75,000 or more are now required to register with the Australian Taxation Office. The combination of the removal of the DMT and the imposition of tax is very problematic. It creates a triple burden for firms shipping smaller value packages into the country: they must now deal with duties or tariffs, they must handle often complex customs forms and paperwork; and they must be prepared to pay tax in Australia whether or not they are based in Australia.

MSME Threshold for E-Commerce Shipping

Wrecking the Promise of the “Micro-Multinational”