The perforation tunnel is the channel for transporting the hydrocarbon to the well bore. The shaped charge perforation operation, however, usually leads to some damage to the surrounding sandstone. Based on the perforation efficiency tests and numerical simulations, a new method is developed to quantitatively evaluate the porosity and permeability damage degree of the compacted zone. The kinematic-hardening plastic flow law is used to describe the sandstone deformation under high strain rate loading. Then dynamic responses of near-tunnel sandstone during perforation process are simulated by using the explicit dynamic analysis code LS-DYNA. Some key data, such as the sandstone matrix stress, plastic strain and volumetric strain are obtained. Subsequently, the damage degree of compacted zone is quantitatively analyzed by using these data together with the porosity and permeability evolution models. By comparing numerical results with the experimental results of core flow efficiency and CT scanning data from the interparticle pore sandstone targets in Shengli oil field; good agreements are achieved, the validaty of the proposed method is verified. It is shown that, during shaped charge perforation, there are two major damage mechanisms for the compacted zone, namely, the plastic squeezing and shear swelling. Near the tunnel's inner wall, the sandstone matrix mainly suffers dilatancy actions, which enhances the porosity; meanwhile, the original structure of pore are changed due to plastic squeezing, which brings a jam to the tunnels, resulting in a reduction in permeability.