What are customs duties?
Customs duties are fees that customs authorities require to pay for goods imported from other countries.
These are the most important reasons why customs tariffs exist:
- As a measure to protect the domestic market ensuring its competitiveness, increasing the prices of products imported from other countries.
- As a collection formula of the country that applies them.
- As a penalty formula to certain countries, applying higher tariffs on their products.
- In retaliation against those countries that apply higher tariffs (China-U.S. trade war, for example)
All goods imported from other countries in international trade operations must be declared at the customs office corresponding to their arrival.
Other documents to be submitted
Along with the declaration of the goods, some documents must be attached, such as the Bill of Lading, the packing list and the commercial invoice, as well as other documents that may be requested by the customs authorities.
The Bill of Lading is a document that serves as proof of the contract of carriage between the consignor and the shipping company. It is issued by the shipping company or its agent and it is stated that the goods have been received to be transported to the port of destination on board the indicated vessel, and under the conditions agreed between the seller and the buyer of the goods.
The Packing list, also known as a packing list or cargo list, is a list of the goods you will import or export, including the content, weight and measurements of each package.
The Commercial invoice is a legal document issued by the seller (exporter) to the buyer (importer) during the international trade operation. It is used as proof of sale between buyer and seller.
Import tariffs are an important factor in calculating the cost of transport in an international operation should not be underestimated during trade negotiation, as they can add a significant amount to the total cost of the operation.
In your import operations you must keep this cost in mind when setting the sales price of imported products.
Customs tariff and import tariff
The Chamber of Commerce defines the customs tariff as follows:
“The Customs Tariff is the official publication containing product descriptions in such a way as to allow all goods to be sorted and their corresponding tax rates determined […]
The Tariff is a tax required to be paid to foreign (non-Community) products when they are intended to be consumed (imported) in the European Union and the way to protect domestic – Community products from external competition from cheaper goods.“
The customs tariff applies, in particular, to goods entering a country, and therefore in practice the terms customs tariff and import tariff are used interchangeably.
However, tariffs may also apply to export operations. In these cases they apply in exceptional situations and on a non-permanent basis.
Payment of the customs tariff
The customs tariff is paid when the goods enter the country of destination, once they are under the control of the customs authorities. This customs tariff is paid by the importer, who must also complete and deliver the legal documentation required for the import operation.
The importer may be a natural or legal person. It is usually the buyer of the imported goods or the buyer’s agent in the destination country.
Import tariff rates
1. Tariffs or ad valorem duties
This is the most common type of tariff and is a percentage of the value of the imported goods, the value of the goods at customs or CIF value.
2. Specific tariffs
Tariff rate calculated based on the quantity of product imported taking into account the weight or number of units imported.
3. Mixed tariffs
Tariff rate consisting of the sum of an ad valorem tariff and a specific tariff.
4. Compound tariffs
A main tariff is established that can be ad valorem, specific or mixed, but the total payable is delimited with a minimum or maximum amount. It can also be a combination, that is, a range between a minimum and maximum.
The Common Customs Tariff and other tariff measures
There are additional tariff measures in addition to the common customs tariff aimed at protecting international free trade. Countervailing, anti-dumping and safeguard measures are the most common.
Please note that there may be other specific tariffs and measures applicable to your shipments.