To calculate the amount of duty payable (‘customs debt’ in EU law) when trading goods, three factors must be accounted for:
- The value of the goods
- The customs tariff to be applied
- The origin of the goods
Normally, the resulting amount is a percentage of the customs value.
Customs valuation
Customs valuation involves determining the economic value of goods declared for import.
There are 6 valuation methods:
- transaction value method
- transaction value of identical goods
- transaction value of similar goods
- deductive method
- computed method
- fall-back method.
‘Transaction value’ is the main method used. This comprises the total amount paid (or to be paid) for the imported goods (Article 70, Union Customs Code). The transaction value is subject to certain additions (Article 71) and deductions (Article 72). If the transaction method does not apply, the other valuation methods would be applied in sequential order, as presented above (Article 74).
- The principles of customs valuation are set out in the WTO’s Customs Valuation Agreement
- For guidance on interpreting and applying the agreement at international level, see the Technical Committee instruments listed in the WCO’s Customs Valuation Compendium.
- The international forums for customs valuation are the WTO’s Committee on Customs Valuation and the WCO’s Technical Committee on Customs Valuation.
The rules in the WTO’s Customs Valuation Agreement have been transposed into EU customs legislation as follows:
- Articles 69 to 76 – Union Customs Code (Regulation 952/2013)
- Articles 127 to 146, Article 347, Annexes 23-01 and 23-02 – Regulation 2015/2447
- Article 71 – Regulation 2015/2446
- Article 6 – Regulation 2016/341
EU countries’ customs authorities are responsible for implementing these EU rules on their territory.
Guidance on customs valuation is set out in the EU Customs Valuation Compendium and includes:
- interpretative notes on customs valuation
- conclusions and commentaries on specific valuation topics
- an overview of rulings from the Court of Justice of the EU in the customs valuation area
- an index of instruments issued by the Technical Committee
Customs tariff
The Common Customs Tariff (CCT) is a system of tariffs applied to goods imported into the EU. The tariff is common to all EU countries, but the rates of duty differ depending on the type and origin of the goods.
Read more: Common Customs Tariff (CCT)
Origin of goods
Rules of origin determine the ‘economic nationality’ of goods. There are two types of origin: preferential and non-preferential.
Read more: Rules of origin for goods