Import duties can have a significant impact on the cost of imported goods. It is therefore important for importers to understand how these costs are calculated and what factors play a role. In this blog we will guide you through the steps to calculate import duties and provide useful tips to simplify this process.
What are import duties?
Import duties are taxes that countries levy on imported goods. The amount of these duties varies per country and per product type and often depends on trade agreements between countries. The purpose of import duties is often to protect domestic industries and generate additional revenue for the state.
Step 1: Determine the commodity code
Each product has a unique commodity code, also known as the six-digit HS code (Harmonized System code). In the EU we use a more extensive version of this HS code: the ten-digit CN code. This international nomenclature determines the category in which a product falls and is crucial for calculating import duties.
As an example, we take a work glove made of nylon and polyester with a nitrile coating, as in the photo above. The international HS code for this is 6116 10, and the EU code, the CN code, is 6116 10 20 19. In this case, the goods code falls under the HS code of clothing.
Category: | (61) Clothing and clothing accessories, knitted or crocheted |
Sub category: |
(16) Gloves (with or without fingers) and mittens, knitted or crocheted |
Materiaal: | (10) Impregnated, coated, covered or laminated with plastics or rubber |
EU specific: |
(20) gloves impregnated, coated, covered or laminated with rubber |
EU specific: | (19) Other |
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Step 2: Know the value of the goods and transportation from China
The value of the goods is an important factor when calculating import duties. This value may be based on the transaction value, the price actually paid or to be paid for the goods when sold for export to the importing country.
Now you need to know what the costs are of the products and transport to the EU border.
In our example, the invoice was USD 30,000, with FOB Shanghai as Incoterm. We add the costs of sea transport to Rotterdam: USD 2,000.
The customs value is therefore USD 32,000.
Step 3: Look up the applicable import tariffs
Each country has its own tariff schedule, which determines the percentage of import duties levied on different types of goods. Consult the customs authorities of the importing country or use online tools to find the specific tariffs for your products.
In the example, the import tariff is 8% from China.
Stap 4: Hoe bereken je invoerrechten uit China?
Import duties are usually calculated as a percentage of the customs value of the goods. This means that you multiply the tariff percentage by the customs value to determine the total cost of import duties. You can look up the percentage of import duties in the TARIC register of the EU or other comparable sources.
So we have to pay 8%, or USD 2,560, in import duties.
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Additional considerations
- Don't forget to take into account any additional costs, such as VAT or specific excise duties.
- Trade agreements and free trade zones can influence the level of import duties.
- Be alert to changes in regulations and fee schedules. This usually changes in the new year, so on January 1.
Conclusion
Correctly calculating import duties is an important part of the import process. By following the steps above, you can ensure that you do not incur unexpected costs and manage your import activities more efficiently. It is also important to pay the correct amount to customs, so that you do not get into trouble later or perhaps receive a fine.
Do you need help determining the HS code of clothing?
Westwood Sourcing offers expert support and guidance for the import process. For example, we can help you determine the HS code of clothing, or apply for a BTI at customs.
