Many online sellers have faced this tempting proposition: a customer sweet-talks them into declaring lower values on customs forms with a persuasive "Just help me save on duties, please." The immediate sale seems guaranteed, but is this truly a golden opportunity or a dangerous trap? Global marketplace sellers should recognize that under-declaration carries significant hidden risks.
The Bitter Reality Behind "Sweet" Under-Declaration
Customers frequently request reduced declared values to evade import duties. Some sellers, either seeking quick sales or operating on false assumptions, comply with these requests. However, when customs authorities discover discrepancies between actual and declared values, sellers face substantial duty back-payments and penalties. Buyers often simply request refunds when shipments are seized, leaving sellers with total losses.
Brazilian Customs: A Cross-Border Seller's Challenge
Among major e-commerce destinations, Brazil maintains one of the strictest customs regimes. Beyond standard import duties, shipments face state sales taxes (ICMS), federal taxes (PIS/Pasep/Cofins), and sometimes excise taxes. Additional charges like storage fees, handling fees, airport charges, and customs clearance fees create a complex cost structure for international sellers.
Brazil does allow a $50 duty-free exemption for personal shipments sent by individuals (not companies). Despite rumors about eliminating this exemption for small packages, the policy remains in effect. However, Brazilian customs rigorously examines international parcels, and any undervalued shipments face immediate seizure, potentially resulting in heavy fines for sellers.
The EU Market: Platform Tax Collection Makes Under-Declaration Obsolete
EU regulations require only VAT payments for goods under €150, while higher-value items incur both VAT and duties. France represents an exception where AliExpress collects VAT regardless of value. For other EU countries, the platform handles VAT collection for sub-€150 orders, while buyers pay taxes on higher-value items directly.
With platforms now managing tax collection, under-declaration serves no practical purpose and may create unnecessary compliance issues.
DDP Model: The Compliant Approach to International Shipping
Many countries now implement Delivered Duty Paid (DDP) models where e-commerce platforms collect import duties at checkout. Some nations require buyer payment, while others charge sellers.
Turkey's DDP system adds duties during checkout without including them in product prices. Colombia's DDP program requires seller payment, with platforms deducting tariffs directly from seller accounts—necessitating cost inclusion in pricing strategies.
In DDP-adopting countries, under-declaration violates compliance protocols while offering no benefits.
Platform Rules: Fixed Declarations for Tax-Paid Orders
Marketplace platforms have updated policies: orders where buyers paid DDP duties or where platforms collected VAT require full-value declarations without modification. Only non-DDP/DDU orders and platform-excluded tax shipments permit declaration adjustments, and even then within strict limits.
Managing Customer Requests for Under-Declaration
When buyers request value reductions on small orders, sellers should consider rejecting such business—the minimal profit potential rarely justifies the substantial risks.
For larger orders where buyers insist on under-declaration, sellers must clearly document in chat systems that buyers assume all responsibility for customs issues. These records provide crucial evidence should disputes arise later.
Ultimately, international sellers must maintain vigilance against the false allure of under-declaration. Compliant operations and transparent customs processes represent the only sustainable path for long-term cross-border business success.