How to calculate customs duty

How to calculate customs duty and what does its amount depend on?

This is a common question we receive, so in this article you will learn not only how to calculate customs duty and what it depends on, but also how not to pay the duty immediately and what are the possibilities of exemption from this duty.

Customs duty – what exactly is it?

Before we write about how to calculate customs duties, let’s start with some basic information.

Customs duty is a fee for transporting goods across the customs border, or more simply, it is a kind of tax imposed by the state on imported goods. The main purpose of the customs fee is to protect domestic producers.

IMPORTANT! All European Union countries form the Customs Union. Therefore, customs duties do not apply to the transport of goods between EU countries. It’s not everything! Within the EU, the same customs rates, rules determining the country of origin of goods and a common definition of customs value apply.

This means that you will pay the same customs duties when importing goods to Poland or other EU countries.

What does the amount of customs duties depend on?

The customs declaration plays a key role here – it is on its basis that the customs duty is calculated. However, before you start filling them out, collect all the necessary documents. It is also worth having full knowledge about the imported goods.

What does the amount of customs duty depend on? Firstly, on the customs value of the goods. This is the value of the goods themselves along with all additional costs such as transport or insurance.

Secondly, the type of your goods, more precisely the goods code or customs tariff code. This is a six-, eight- or ten-digit numeric code that you can find in the ISZTAR or TARIC system.

If you do not know how to correctly determine the customs code or tariff, we invite you to our related trainings, thanks to which you will gain the necessary knowledge in this area or to cooperate, then our agents will do it for you.

Finally, the amount of duty depends on its rate. This is a percentage fee calculated on the customs value of the goods. The rate you will be subject to depends on the type and origin of the goods and on trade agreements between the European Union and the exporting country. Most often it is from 3-8% of the customs value of the goods.

How to calculate customs duties?

The first step to calculate customs duties is to determine the country of origin of your goods. Although it may seem very simple, it is not always so. Why? Because not always the country from which you export goods will also be the country of origin.

IMPORTANT! Remember to have certificates confirming the country of origin if you want to benefit from reduced or zero rates.

The next step to calculate the customs duty is to classify the goods, i.e. check what product category the imported product belongs to. In international trade, the so-called The Harmonized System (HS), which assigns special codes to goods, called HS codes, to uniquely identify them.

Finally, you need to check customs rates.

Sounds complicated? We will try to explain how to calculate customs duty using a simple example. Let’s assume you import notebooks from China. Their value is PLN 10,000, additional costs are PLN 5,000. In our example, the basis for calculating the customs duty is PLN 15,000 (customs value of the goods). The basis for calculating VAT is PLN 10,000.

The customs tariff code for notebooks is 4820 20 00 00, the customs rate is 0%, the VAT rate is 8%. Therefore, your customs and tax liabilities in our example will amount to PLN 800. This is the amount of VAT because the customs duty for this product is 0% at the basic/ordinary rate, called the erga omnes rate.

Please remember that the above calculation is only an estimate. If you want to calculate the customs duty you will have to pay for a specific product, contact us. Our experts will not only calculate customs duties for you, but will help you through the entire process.

Is it possible not to pay customs duties?

Customs duties must always be settled. However, there are cases when they will not apply to you, or you will be able to defer the payment, i.e. postpone it in time.

When does this happen? When you import your goods from a third country where your goods come from and the EU has a signed agreement with that country. Therefore, as we mentioned, determining the country of origin of the goods is extremely important.

Having the appropriate certificate will entitle you to apply preferential rates, which are often set at 0%. However, you can postpone the payment of customs duties if you use bonded warehouses. These are warehouses (also private ones) that have appropriate permits from customs authorities and are subject to their supervision.

If you decide on this solution, you pay customs duties and VAT only on the products that you currently introduce to the market.

And if you are interested in customs warehouses or want to store your goods there, contact us. We have been supporting importers from all over the EU for over 30 years.