If you wish to import goods into the European Union, then these have to be declared to Customs. Customs will then levy import duties. Whether and how much import duties you will have to deduct are things you can calculate yourself, providing you with a good estimation of your products' cost price. Calculating import duties is something you do in 2 steps:
Note: We are assuming that you will be bringing your goods into the European Union by air freight. The goods are imported from outside the European Union. The amount of import duties is not affected by the airport or EU country where your goods arrive; after all, the European Union is one Customs area.
Before we can do calculations, 5 things need to be researched:
Invoice value of the shipment
You can find out the invoice value of your shipment from the supplier of your goods. Your supplier has to charge 0% VAT.
Delivery terms
You have to know what the terms of delivery are. You agree with your supplier the terms under which the goods are being bought. These delivery terms are standardized, and are known as Incoterms. The most commonly used Incoterms for air freight shipments are Free Carrier (FCA) and CPT (Carriage Paid To) / CIF (Cost, Insurance, Freight). With FCA, your supplier organizes international air transport, but you pay for the cost of this transport. With CPT/CIF, your supplier organizes international air transport and also pays the cost of this transport.
Note: If you buy goods with CPT/CIF delivery terms, the costs of international transport are included in the invoice value of the goods. So pay close attention to the delivery terms being applied when comparing suppliers to one another. The amount of import duties is not affected by whether your shipment is being sent FCA or CPT/CIF.
Freight costs
You can ask your supplier what the costs of international air transport to an airport in the European Union amount to. Your supplier can find out these costs from his shipping agent. You are specifically asking for the amount of:
Country of shipment by air transport and percentage freight costs to be added or subtracted
You have to ask your supplier in what country your shipment is being put on international air transport. You then use the table below to look up what percentage of freight costs need to be added to (in the case of FCA) or deducted from (in the case of CPT/CIF) the freight costs.
Type of goods and percentage import duties
Finally you have to calculate the percentage of import duties appropriate to your type of goods. To this end you must look up the type of goods and their origin in the TARIC Consultation (click here for the English version). The country of origin of your goods is the country where the goods were produced. Your supplier will probably be able to tell you what goods code applies to your goods. This will save a lot of searching.
Note: The percentage import duties for some goods is season-dependent, and is subject to gradual change throughout the year.
You are now ready to calculate the import duties. This is done in the following way:
Invoice value + (pure freight costs + fuel supplement) X percentage of freight costs to be added up + other cargo supplements = Customs value. The Customs value is the value your goods have at the border of the European Union.
Then: Customs value X percentage import duties = import duties to be levied.
Invoice value - (pure freight costs + fuel supplement) X (100% - percentage of freight costs to be added up) = Customs value. The Customs value is the value your goods have at the border of the European Union.
Then: Customs value X percentage import duties = import duties to be levied.
Please find below a document containing examples.
Note: There can be exceptions to the calculation method above. J. van de Put's Customs experts can help you calculate the import duties to be expected should you have any trouble in this regard.
There are worldwide trade agreements or bilateral agreements between the European Union and individual countries to promote export from developing countries. For that reason you might be able to get a discounted rate on your import duties. If you would like to know whether your shipment is eligible for such a discounted rate and what conditions must be fulfilled in order to be eligible for it, the best thing to do is to contact J. van de Put's Customs experts.
