How do you determine your customs duty costs?
Customs duty is a transaction-based tax on each imported item from outside of the EU. As such, your customs costs will vary depending on product, origin, value of each item.
Your customs duty costs will depend on the following four elements:
- The customs classification of your imported goods determines your duty rate. There are over 16,000 commodity codes listed in the customs tariff and identifying the correct one is fundamental to your customs compliance.
- The origin of your products also affects the duty rate. The EU has entered in to various trade agreements that allow qualifying goods from certain countries to attract lower rates of duty. There are also additional duties charged on goods originating from certain countries.
- The customs value of your products is usually the price you pay for the goods. The regulations set out a list of items that you must add to the price payable for your goods (e.g. freight and insurance). The regulations also allow you to deduct certain items (e.g. finance charges).
- Once you have established your notional customs cost then the customs procedure you elect determines if and when you need to pay customs duty. The regulations include various procedures to relieve your from paying duty or delaying payment.