Importing with Incoterm DDP to Chile without Setbacks

Importing to Chile under the  Incoterm DDP  (Delivered Duty Paid) implies that  the seller assumes all costs and responsibilities until the delivery of the goods at the final destination, including customs procedures. In Chile, compliance with these procedures is crucial to avoid delays, additional costs, and possible penalties. The following is a detailed guide for suppliers to ensure a smooth and successful import.

Exporting to Chile with DDP: Be Careful!

Chile maintains strict customs controls, so it is essential that suppliers exporting under the  Incoterm DDP  understand and comply with  all requirements  to avoid delays or retention of their goods. The following are the  most important points  that you will have to take into consideration.

1. Taxes and Duties in Chile: A Key Factor in Importing

The  payment of taxes and duties  is an essential component in any import process, and Chile is no exception. Under the DDP Incoterm, the seller assumes responsibility for these costs. The following is a  breakdown of the main taxes and duties  that may apply to goods  imported into Chile.

• Customs Duty:  It is a 6% tax that is applied on the  CIF value (Cost, Insurance, and Freight)  of the goods, and its percentage varies according to the type of product and its origin. Chile has free trade agreements with several countries, which can reduce or eliminate the tariff for products originating in those countries.
• Value Added Tax (VAT):  It is a 19% tax that is applied on the  CIF value  of the goods plus the customs duty.
• Other Taxes:  In some cases, additional taxes may apply, such as the specific tax on certain products (fuels, alcoholic beverages, etc.) or the additional tax on imports.

Example of Tax Calculation

Suppose a supplier exports a machine to Chile with a  CIF value of USD 1,000,  the customs duty for this type of machine is 6%. The calculation of the taxes would be as follows:

Note:  It is important to remember that these are only the  basic taxes.  There may be other taxes or duties applicable depending on the  type of merchandise.

Recommendation:  In the following link prepared by our Customs Agency you can find  accurate and updated information on the taxes applicable to your specific merchandise.

2. Commercial invoices must always reflect the actual market value

It is essential to understand that Chile has a  strict customs policy. No product can enter the country without prior payment of the  corresponding taxes and duties. Therefore, all commercial invoices must reflect the  actual market value  of the goods,  regardless of whether they are gifts, samples, or subject to warranty. If Chilean Customs detects a  discrepancy  between the declared value and the actual market value, the goods will be retained. The retention process can last several weeks, during which you will not be able to access your products. In addition, you are likely to be fined an amount equivalent to  30% of the FOB value  determined by Customs. To avoid these inconveniences and additional costs,  always make sure that commercial invoices reflect the actual market value of the goods.

3. Request in advance from the client the necessary documents for the import declaration

In Chile, Customs Agents are responsible for preparing and submitting  import declarations. For this, Chilean Customs requires certain documents from the Chilean entity that are fundamental:

• Identity Card of the legal representative of the Chilean importing company

• Unique Taxpayer Number (ROL) of the Chilean company

• Extract of the company indicating who the legal representative is

It is common for  exporting companies  that sell under the  Incoterm DDP  to encounter difficulties in obtaining these  documents from their Chilean clients. Some companies have  internal information security policies  that prevent them from sharing this documentation with third parties. If the Customs Agent does not receive these documents,  they will not be able to start the process of releasing the goods, which can result in significant delays and even in the presumption of abandonment of the cargo, which entails considerable additional costs.

4. Carefully verify the consignee’s data (Chilean Entity)

It is crucial to  carefully verify  the data of the importing company. An error in the company name, the type of company (S.A., SpA, Limitada, etc.), or the inclusion of an incorrect fantasy name can cause significant delays in the import process.  Correcting these errors can take several weeks. During this time, the goods will remain unreleased and could fall into presumption of abandonment, which would significantly increase costs.

5. Request the Notice of Retention from the Chilean entity in Courier shipments

In Chile, Courier companies such as  FedEx, UPS, and DHL  issue a document called  Notice of Retention  approximately 6 hours after the arrival of the goods in Chile. This document  is essential for the Customs Agent to be able to start the process of releasing  the goods. The consignee will receive the notice of retention  by email  and must send it immediately to the Customs Agent. If this document is not provided, there will be delays in the clearance of the goods.

The following is an example of an extract from an Air Waybill delivered by  FedEx, the format is similar for the other Couriers:

7. Find the best way to pay customs taxes

It is important to bear in mind that the taxes generated in imports to Chile can be paid in two ways:

• Directly through the  Treasury portal,  using the credentials of the Internal Revenue Service (SII) or “Clave Única” of the consignee (Chilean importer)
• Through the  Customs Agent.

In the event that you want to pay the taxes through the Customs Agent, you have to take into consideration that international transfers usually take between  2 and 4 business days to be reflected in the accounts in Chile,  which can cause  delays in the payment of taxes and generate additional storage costs. In addition, often the transfers do not include the exact amount due to  bank fees, which forces a second transfer and increases costs.

Recommendation:

It is imperative to work with a Customs Agency that offers  faster and more efficient international payment options, such as  credit/debit card payment links,  to avoid these inconveniences.

Source:  written thanks to the help and cooperation of  Contenext Chile, international logistics company.

Do you need a reliable Customs Agency?

Based on the considerations mentioned, the Agencia de Aduanas Aquiles Pérez stands out as an outstanding option due to its solid reputation, extensive experience in customs management, commitment to legality, and capacity to provide comprehensive advisory services to clients. The agency’s constant communication with various participants in the international trade chain positions it as a reliable choice for ensuring the success of international trade operations.

Furthermore, choosing a reputable customs agency like Agencia de Aduanas Aquiles Pérez goes beyond mere regulatory compliance, as it represents significant cost savings and the assurance that operations will be carried out transparently and successfully. Therefore, based on its track record and commitment to legal compliance, Agencia de Aduanas Aquiles Pérez is highly recommended for anyone seeking a reliable customs agency.