#593 – The Expat Files: Navigating Customs, Shipping, and Taxes in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now I wonder Hello there all you expat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started I think one of the top questions I get about expat life is how to bring and ship things down awful lot of confusion in that department now Everyone knows there are rules and regulations about bringing things into a foreign country

[00:46] But this is Latin America and you have to remember that down here rules and regulations are made to be broken And if not broken at least extremely flexible and you know throughout Latin America You have off the gringo tourist trail and on the gringo tourist trail That makes a big difference which one you're talking about when you ship stuff down because you see when you're on the gringo tourist trail Which is where 95% of all gringos hang out. That would be Panama Costa Rica much of Mexico, etc One of my favorite definitions of whether you're on the gringo tourist trail or not is if you've got gringo Realtors in the area then you're definitely in the thick of it But there is such a thing as gringo tourist trail light and gringo tourist trail heavy as well as mass gringo tourism trail and echo gringo tourism trail the latter being infinitely preferable because they don't drag around their spoiled ass

[01:37] Selfie obsessed kids another good definition of being way off the gringo tourist trail is if you live in a gated guarded community And you're the only gringo there and you're known in a nice way, of course as the gringo or the gringo family Anyway, when you're on the gringo tourist trail bringing goods and packages in it stands to reason that the people in customs at the airport or The adwana if you're shipping things in are gonna be much more strict with you than the locals They'll hit you with as many taxes and fees as they can get away with because they know first world people have loads and loads of It's what you might call the gringo Disadvantaged because that's what they're thinking and they know pretty much whatever they assess you with that day You're gonna pay up even if it's arbitrary and you're not gonna bitch That as opposed to a local Latin family. They often get preferential treatment

[02:26] For example, if they get shipped a care package from an illegal relative up in the States and believe me That happens a lot around Christmastime Well, if that package gets hit too hard with taxes and custom fees Many times the person receiving that package will just walk away They just don't have that kind of dough so it remains at the adwana and sure they're pissed off about it for about two seconds But hell it's generally a gift coming from someone up in the States and they didn't expect it anyway Now over the years, I've had this and that shipped down. So I've had a number of discussions with Adwana guys I also know a guy who's retired now He worked 27 years at the adwana and he says it's a very good job. And why did he say that? Well, he told me that about once a month

[03:11] He was able to bring home one of his own care packages to his four kids We're talking shoes and t-shirts furniture household items, etc That besides the salary was a big perk for guys working at the customs house or adwana So, what do you think all that stuff came from? Certainly, none of that stuff was shipped down by gringo's the gringo's always pick up their stuff and pay the fees He said 5% or so the stuff never gets claimed. Why too costly for the receiver? So guess who gets it? Look at it this way If an average person from El Salvador receives a box from the relatives up in Tucson With all kinds of brand new stuff in original boxes Well, no matter who sends the stuff or who's receiving it. They hit you hard and heavy for anything that's brand new

[03:58] And many times the cost of retrieving a large box at the adwana is more than a month's salary for your average Salvatoreño Now as clever as Latin Americans are and they really know how to beat the system in their own country When it comes to living outside their home country, it's a completely different thing, especially if they're illegals Remember the number one hobby for Latins in their home country is tax evasion and they're really good at it But when they're living up in the States a first world country They know they have to obey all the rules and regs of that first world shipping company or the stuff Just won't make it down to Latin America That said since Latin families up in the States ship things down to the home country infrequently They're really not on board at all with some of the tricks

[04:44] You can pull to avoid those big custom charges And yes, there are many things you can do to keep those charges to a minimum So then you might ask is it illegal to mess around with the paperwork to obtain a lower fee? Well after I explained what many long-term experienced gringos do you tell me let me ask you this Would you call it illegal to take a receipt? Let's say from Best Buy or Sears then photoshop the date so it appears to have been bought two years previously Photoshop the price so that it's not 400 bucks But it's a hundred and thirty two bucks and include that in the bill of lading when you ship the thing down In whose book is that illegal? Well, I'll argue this point all day long you already paid taxes on it when you first bought it So why should you pay taxes again? Just because you're shipping it to another country to me. That's the part. That's illegal

[05:34] That's the part that's unjust. That's double taxation You're getting your pocket picked twice by stinking criminal governments. So no righteous emails about that The fact is that most long-term Expats over the years have saved themselves thousands even tens of thousands of dollars by making a few additions and Subtractions to the paperwork and altering slightly their packaging and boxing techniques Come to think of it since I've been down here. I've shipped three 40-foot containers from the states One of them just loaded with household stuff the other two just chuck full of stuff I needed to open a particular business and I shipped a car down to all two different countries at different times So you could say by hook and crook I've certainly learned a lot about shipping things down to Latin America the dues and especially the don'ts number one

[06:24] You must label everything Precisely if you're shipping down a dishware set you have to label every plate and every spoon fork and knife In other words, you're gonna take a piece of paper. You're gonna mark all the items one through whatever Let's say you have a hundred you're gonna make two columns on that piece of paper one on the left in English and one On the right in Spanish Naturally, they only want it in Spanish, but the English part is for you So if your Spanish sucks and you ever have to go through that list with them You'll know what they're talking about And of course you should have both that Spanish and English version printed in multiple copies one for you two for them and one Somewhere else in a nice safe place in case they lose theirs or you lose yours So that they can be easily referenced and believe me always plan for the worst that they're gonna lose stuff

[07:11] Not you and the boxes should be marked very well on the outside. Suppose you have five boxes You're gonna put box number one box number two through five and you're gonna use big wide felt Magic marker letters on each box not just on the top But on all sides and each box must have that packing list that you've made up taped to the outside of it Cover the whole thing with clear plastic wrapping tape so you can see through it But water won't damage it also have another copy on hand that you'll slip in an envelope and pack that inside the box, too Now lately you've heard me say over and over again It's not a good idea to ship down a container full of goods You're better off selling most of your stuff and buying new or used down here

[07:57] Nor is it a good idea to ship a car down unless of course you've got pensionado residency status in one of those Latin countries Remember, that's a special residency status for retired people that can prove they have an income every month Then they'll allow you to ship a container down one time only and buy a car every three to five years And you'll only pay the EVA. That's the country's value-added tax Which ranges from 10 to around get this 25% depending on the country so you'll pay that but be exempt from the import taxes which range anywhere from around 20% to 75% on the present value of what you're shipping. Whoa and that 75% tax Well, that would be Brazil, of course

[08:42] So it really can be worth shipping things in if you've got pensionado status Even so if the item is a brand new car or items that are brand new and in the original box When you bring a menu, you'll take a substantial hit of at least 10% of their present value That's why by the way You don't want to have any of your stuff in a new box or in the original wrapper or with the original Undoctored receipt now, let's take for example a flat-screen TV That's worth 500 bucks and you're bringing it into Argentina under pensionado status So you don't pay the import tax only the EVA say it's brand new and in the box and you have the original receipt 500 bucks. Well in Argentina the EVA or value-added tax is get this 21% so you've not only paid 500 bucks for the product up in the States and the cost of shipping it down

[09:33] You're paying slightly over a hundred bucks in VAT tax So you can see why anything you're gonna ship down should be used or appear to be used And here's another big tip if you have the original receipts It's all the better and even on a more or less expensive item Let's say you're bringing down a leather couch that cost you three grand Well, if the receipt shows that it's three years old the older the better actually the aduano will put a low nominal value on it So if it was three grand, they might put down in their records that it's worth 500 bucks But still remember if you're bringing it to a place like Argentina, you'll pay 21% on that rate Which is why a good hand at Photoshop is always appreciated then miraculously That's so-called original receipt could suddenly read 800 bucks new for that nice Italian leather sofa

[10:23] By the way expats are always looking for people with those kind of skills Sure, it's a game but almost all gringos and expats who've been down here a while are playing it Now you might think the guys and gals working down at the aduana are tuned in to these kinds of machinations Well, they're not unless you take it too far or to the point of absurdity because items especially expensive items Have a certain look and feel to them But let me warn you if you have a pretty good size object and you don't have a receipt at all That's when they're gonna hit you hard and heavy Because you see they have their own lists and blue books and present values that we don't see you or know about and they're in Spanish so if you don't have a legitimate look and receipt no matter what they put down for the value There's no point in arguing with them, especially for cars and trucks and such They use the same charts and blue books that we can look up in the states and on the net

[11:12] if the car is decent looking and in running condition, you can't fool them unless the car or truck is listed as a wreck or Salvaged on the title in that case you can get away with paying almost nothing a couple hundred bucks Why do you think there are so many tens even hundreds of thousands of cars and trucks down here in Latin America? That have speedometers and odometers in miles not kilometers Well, they were bought up in the states mostly as wrecks shipped down and completely gone open repaired here in Latin America Because the labor is so damn cheap well The only way that's economically feasible is if they could get it into the country without paying the VAT on the real cost of that Vehicle as per the actual blue book present value if the people that bring those down had to pay the import tax and the Eva

[11:57] There'd be no profit in it That's why they get to paperwork to show that it was a wreck now for a gringo to try to pull that one off I don't recommend it unless you know a lot about cars and you speak Spanish quite Well, the people that do that for a living down here in Latin America know all the tricks and all the angles plus they usually grease the guys at the border and at the Adwana and that's why you see so many late model cars down here with stickers and logos on their trunks or back bumper Showing the American dealership where they were purchased in fact oftentimes will be behind a car and you'll say hey I can't believe it that car was bought right down the street from where I used to live up in Chicago Dan Riley Ford Cicero, how about that? And it's true That's where that car was originally purchased new but somewhere along the way it got wrecked and ended up in one of those big

[12:47] Auction lots got purchased on the internet and shipped down to Latin America And now it's right in front of you at a stoplight in Managua, Nicaragua Coincidence or karma who knows but you do see that kind of stuff all the time So then should you buy one of those cars if you think it's a good deal? Well, it's buyer beware That's for sure because that car might have been in a terrible wreck or a flood or maybe it was side-swiped badly But it's in great mechanical condition and now it's perfectly reconditioned Latins are really good at bodywork You know if you're not a car mechanic or an expert it'd be difficult to tell so again It's buyer beware and hit and miss even if you take it to a mechanic and have him check it out You never really know there's a lot of things you can't see sure He'll be able to tell you if it's had a severe hit and the frames out of alignment or the engines slipped on its mounts

[13:33] Whatever the big obvious stuff again. I'm not saying you shouldn't buy one of those, but you do have to do your homework in fact I've often said there's a niche to be filled by a mechanically inclined gringo Offering a service like that to check out used cars for prospective buyers The problem is what will you charge and are latins willing to pay for that service? I know most latin men are too macho to go for that But I think there's a big market with latin women and gringos who might want to buy a car I mean no one wants a lemon right anyway That's just one of a thousand ideas for gringos who think they might need to have an income down here Oh, and by the way I was talking about how you prepare the packing list if you're sending down some items in boxes or in a container Whatever the good news for all you coming down to my 2017 latin insider seminar

[14:19] We're gonna go over some of this stuff in great detail and provide you with actual packing list samples and such and we'll talk about The right companies to use too because even if you're not shipping anything down right now in the future Certainly you're gonna order some things from Amazon whatever or ship some stuff down later Anyway, you learn some of the tricks and you'll learn how to save some real money doing that You know as it turns out in the last couple of years seems like every gringo I know is ordering stuff from Amazon and you could get into a real complicated hairy mess doing that or it could be very easy And I'm gonna explain quite a bit about that right now today Sure, if you're gonna occasionally receive items from the states and you have people coming back and forth You can always ask them to order and receive this stuff for you Or you can go to Amazon or eBay yourself and have this stuff shipped to your friend up in the states who will be coming down

[15:09] But that's only if the items are small enough to put in their suitcases and bring down Otherwise, they might have to pay the extra charge as a third piece of luggage Which could be 50 bucks or more but it's not a good idea to have it in the original box or looking like new For example, if you're bringing down a new computer Don't leave it in the box act as if it's your computer the one you're using because then you're never taxed on it Even carrying two or maybe three computers through is okay. Some people have more than one However, let's say you're bringing down a compact Bose stereo system. That's worth fifteen hundred bucks Well, the trick is to make it look used you want to unpack that thing, too Even superficially scuff it up a bit if you have to and do by all means Photoshop the receipt or get a Costco or Best Buy receipt Whatever and have it down at a substantially lower cost to have some kind of proof if they dig through your stuff and question it now

[16:00] That's highly improbable and will only happen if you really stretch the limit I'm talking now about if you're off the gringo tourist trail But if you're on the tourist trail like in Costa Rica, for example, it's all about trying to find items They can assess taxes on and as for used items They'll almost always get through without a problem new items if they spot them Yep, you'll have to pay tax on them though. Not if they seem to be for personal use only sometimes That said make them look used put them in a completely different box and have a Photoshop receipt with a much lower price and an Older date on it or not again. I'm just telling you what most astute long-term expats do it's your call Completely, by the way, you don't have to show an original receipt a nicely scanned copy is just fine because these days, you know

[16:48] Many times the original receipt you get from Walmart or office depot, whatever looks like a copyright scan itself Okay, that said what about actually shipping stuff down through a moving company or mailing service, whatever Well, I found out by hit and miss It's never a good idea to pick a moving company that advertises in an english-speaking gringo magazine Then you're gonna pay gringo prices and if that's okay with you, well do it. So who do you use? Well, I'll tell you in a second But here's another tip if you're down here and ordering anything from up in the States Amazon eBay, whatever You should never have them ship directly to your latin american country Even though those companies offer worldwide shipping at a price, you know, you probably remember in a past show I mentioned that you could use your lawyer's office as your mailing address and it'll always get there. That's true

[17:37] Even so I repeat you should never have amazon ebay or anybody else you're ordering from ship directly to your country Your lawyer's office or even if you have a business office because you'll pay through the nose They'll almost always ship it by courier like dhl or ups And that's always the most expensive way you could easily pay what that product's worth or more just in shipping charges So then what do you do? Well, the best idea is always to go with a local service in the country that you're living in That has a miami office mail drop So how do you find one of those? Well when you're in your latin country Just go to olx.com for your country and put in compress the internet in the search box. That's comparas de internet That means buying on the internet

[18:24] Or just plug in servicios de courier That would be courier services or if you're just in your regular search engine box type in Servicios de courier and then put the latin country that you're in now you could use fedex ups or dhl But they're very expensive There are all kinds of latin american companies that are just as secure and probably a quarter or less Of those us companies now as you can see this stuff's all in spanish So you'll have to know those basic words not difficult Even so there's always someone in the office that'll speak english because we're looking for courier or freight Forwarding services that have offices in my jammy, right where they receive all their packages from the states labeled in english And from what I understand there is a rumor going around that there are eight or nine people in miami who actually speak english

[19:14] Though it is just a rumor So anyway, even in the smallest latin countries like el salgoror They have courier slash freight forwarding services that have an office in my jammy And here's how it works and the best way to do it You just go on your computer order your stuff from amazon or whatever And then my jammy address will be your shipping address They'll have a sign up page online where you give them your dad's your name address telephone number and all that And of course, that's where astute expats will put their name But their lawyer's address because that's where many astute expats have their packages delivered So when you sign up they'll give you a code to put up your name So for example, if your name is donnie diamond Every package you have sent from amazon or any internet company will have your name donnie diamond and their

[19:59] Miami address, but after your name, you'll have a code like rxcp3 That's how they sort the packages that are going to end up with you And that's by the way How you track your package as it's gone from amazon to miami and down to whatever latin country you're in And how long does all that take used to take weeks even months? But these days because internet shipping is so easy and fast And these services that have a miami office are all geared up for that You could order a product. Let's say today in three days It'll end up in miami in two or three more days. It'll end up in your latin country Now normally these shipping companies have an office and a sorting facility Right next to the international airport in the latin country and when it arrives They'll send you an email and ask you if you're going to pick it up or should they send it out to your address?

[20:50] Which again for astute expats will be their lawyer's address And by the way, most of these shipping companies will let you pay the fee in cash when it's delivered So normally it takes about a week for the product you've ordered from amazon or elsewhere to get down to your country in latin america However, these freight forwarding services have rates that vary all over the place Though they're all very dependable and a hundred percent of the mail gets through And you'll be able to track each package through your own computer In fact in the last few years i've used those services myself at least 10 or 15 times And i've never lost a package or piece of mail. In fact, they guarantee it. So who has the best deal? Well, that's the hitch the shipping price you pay is all about the weight or volume meaning box size The price you originally paid for the item and a few other factors. You know, it's funny

[21:39] I've stopped into a couple of these offices. They're pretty busy Yet i've never once seen another gringo in there only upscale latins are in there picking up their products They would be the ones that have cars No one of english have a us dollar credit card and such to be able to make a purchase through amazon They would be the two to three percent of latins who've been to the states legally And have kids in private helicopter schools, etc More or less that's where you're going to find extreme gringo wannabes Anyway, I wanted to mention these services are not just for amazon ebay and internet purchasers Suppose your dear old senile grandma knitted you a box of doilies for your birthday Well, you just tell the old deer to send them in your name to that miami office Then in a couple of days those precious doilies will land safe and sound in my jammy

[22:28] And in a few days end up at your tele honduras beach house dumpster I know that's main, huh? Oh and another good thing to know is even though these services have their main office near the international airport In any given latin country they'll deliver your items right to your door anywhere in the country You happen to be usually for a nominal charge of around three bucks. No matter what you've ordered Well within reason, of course I don't think they'll deliver a john deere tractor or eight person jacuzzi for three bucks Though I could be wrong. You can buy that stuff on the internet So anyway, I mentioned that the charges for these places vary all over the place But there are ways to get a very very good deal For example, most services will charge by the pound

[23:13] Anywhere from around two dollars and fifty cents a pound to maybe ten bucks a pound. It's a huge spread, right? Well the hitches for those more expensive services you don't have to pay any taxes or a duana charge It's all included at first. It sounds outrageous But a mighty good deal if you're buying a small expensive item like a digital camera jewelry medicine supplements Special electronic equipment. There are a lot of things that are small light and very expensive So for that kind of stuff, that's the best way to ship by far For example, not so long ago. I bought around four hundred dollars worth of vitamins and supplements on the net In that case there was free shipping anywhere in the u.s So I had them shipped to the miami box Then to get the shipment to latin america I used a service that charged six dollars and fifty cents a pound and paid a grand total of 26 bucks

[24:03] Or I could have used a service that charges two dollars and fifty cents a pound But you pay the additional taxes and a duana fee That would have meant for the previous example I'd have paid about twenty percent of four hundred dollars plus the shipping fee or around a hundred bucks total So obviously the shipping service for eight bucks a pound and no aduana fees, etc. Was the best choice by far So do you get what i'm saying? You have to know exactly how you're charged by each service and you have to know the value and weight of your product To decide which service to select so as for me I use two different services Depending completely on the weight and the cost of the item. Oh, and here's a little trick Have any of you ever ordered from that internet company alibaba?

[24:50] There is one very good thing about that company Even though it's much more complicated to place an order with them than amazon If you like you can place your order directly with a sales person by chat or email And the cool thing well, they'll come right out and tell you they'll put any price on the invoice you want Wow such a deal, huh? Just recently I bought a 300 item and asked them to write down 40 bucks on the invoice and they did So I had them send it to the miami office of the two dollars and fifty cent a pound service such a deal, huh? So all told it cost about twelve dollars for shipping from miami to latin america Now we're talking about smaller expensive items here and using services that charge by the pound Now most of these shipping companies have much better rates for larger items by volume and items over a certain weight

[25:40] If you don't mind waiting a couple extra weeks, they'll send it by land or sea which is also much cheaper In fact, let me translate this brochure from one called courier logistics It says the total included price is six dollars and fifty cents a pound including all taxes and charges no hidden costs However, if you send something that's over a hundred pounds, we have a special economy rate And all our charges include door-to-door delivery. Hmm. I wonder if that includes jacuzzis and john deere tractors, maybe Oops, we're getting towards the end now And I have a lot more to talk about regarding shipping things from the states to your preferred latin country Stay tuned for part two next time that said like to remind you you can still sign up for my january 2017 expat insider seminar

[26:27] Time to get that plan b in action And coming to my seminar is one of the best ways to get the connections necessary to get that plan b going Believe me It's awful hard to get started when you don't have some knowledgeable people with boots on the ground experience to lean on That's a big part of what the seminar is all about. So go to The new expat.com click on johnny's 2017 seminar link and you're there Do get in on the 500 dollar early bird discount for a single and the thousand dollar discount for double occupancy While at the new expat.com check out john gault's famous pre and post seminar trips. They're not to be missed You'll kick yourself a hundred times if you don't fit those into your schedule Oh, and by the way, i'm still getting emails from people saying they're getting some junk mail from expat wisdom a former site

[27:12] I used to be affiliated with but no longer they're at it again trying to snag your data. So don't fall for it I don't recommend anyone deals with them I'm not affiliated at all with them anymore and for good reasons So again buyer beware and finally don't forget to check out my youtube channel See all the fun slides and pictures that go along with the show do subscribe. It's free south of the border You've been listening to the expat files living in latin america coming to you twice a week from somewhere south of the border Email me the expat files at gmail.com And if you want me to help you sort out your own latin american plans schedule a one-on-one consult with me Just send an email and let me know at the expat files at gmail.com