Harmonized Codes

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

Decoding Harmonized Codes

In eCommerce, duty (which is determined by a harmonized code) is rarely the costliest item of your total landed cost. In fact, by looking at the hundreds of Zonos™ eCommerce clients, 62% of orders have zero duty on their imports. Since eCommerce orders have a relatively low value, orders under the de minimis value are quite common.

Items are non-dutiable sometimes, 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 Zonos cross-border orders is 4.2%.

Zonos 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], or brokerage fees.

Dynamic HS Classification

Zonos Checkout dynamically classifies your items at the time of checkout to calculate the appropriate duty and tax rates by country and item. HS classification is achieved with machine learning: Natural Language Processing (NLP) and image analysis, which is only available with Zonos Classify. Although dynamic classification occurs on all items, you need to upgrade to Zonos Classify to have visibility to the classifications result.

Variable Type Use case
items[index].description (required) NLP is 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 map 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 such as textiles, to determine a Subheading
items[index].imageURL Zonos Classify image recognition

Send as many variables as possible to ensure the best classification and duty tax calculation.

What is a harmonized code?

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

Below is an example for “tennis shoes” and how the Harmonized System classifies it.

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