Harmonized Codes

A harmonized code (HS Code) consists of 6 digits and is used universally by 180 countries to determine duty on imports.

Decoding Harmonized Codes

In eCommerce, duty (which is determined by a harmonized code) rarely is the most costly piece of your total landed cost. In fact, looking at the hundreds of iGlobal Stores eCommerce clients, 62% of the orders had zero duty on their imports. Since eCommerce orders have a relatively low value, orders under the de minimis value are quite common. Also, at times items are non-dutiable because the import country sets a zero duty rate or there is preferential treatment from trade agreements. To add perspective, PayPal charges a 4.4% transaction fee on international sales and the average duty rate for iGlobal Stores cross-border orders is 4.2%.

iGlobal Stores Recommends

Small to medium-sized companies can offer a landed cost without harmonizing their catalog. The ROI in harmonizing a catalog will miss the mark if your landed cost solution is unable to calculate advancement, DDP fees, or brokerage fees.

Dynamic HS Classification

Though the upfront investment in harmonizing your catalog may not lend an ROI, iGlobal Stores Checkout still dynamically classifies your items at the time of checkout. HS classification is achieved with machine learning and Natural Language Processing (NLP). For the best classification results, send as many variables as possible to the iGlobal Stores Checkout or API.

Variable Type Use case
items[index].description (required) NLP used for Subheading determination
items[index].unitPrice (required) Duty percentage is applied to total price
items[index].quantity (required) Duty percentage is applied to total price
items[index].itemCategory Assists in mapping to the correct Chapter or Heading
items[index].itemSubCategory Assists in mapping to the correct Chapter or Heading
items[index].itemHSCode If you send an HS code we will use it, otherwise we will assign one
items[index].itemBrand Helps maps Chapters and avoid false positives in classifications
items[index].countryOfOrigin MFN (Most Favored Nation) may influence duty rate
items[index].itemUrl NLP used to parse URL parameters
items[index].itemDescriptionDetailed NLP used for Subheading determination
items[index].itemMaterial Important for items like textiles to determine a Subheading

What is a harmonized code?

A harmonized code is six digits and is maintained by the World Customs Organization (WCO). The final 7-10 digit codes are maintained by the import county to monitor statistics and to apply different duty rates where the six-digit determination does not provide enough detail for a specific country of import to apply duty or control the import of particular items. Here is an example of a Tennis Shoe and how the Harmonized System classifies it.

Chapter Heading Subheading
Footwear Soles of Rubber Tennis Shoes
64 6404 6404.11