Import Duty and Taxes

TL;DR: Import duty is a tax on goods based on their classification and origin. On top of duty, most countries also charge VAT, GST, or a similar consumption tax at the border.

Customs duty is set by the importing country’s tariff. The rate depends on the HS Code, the country of origin, and any trade agreement or special measures, such as anti-dumping duties. Duty is usually a percentage of the customs value, though some goods carry a fixed amount per unit.

VAT or GST is a separate charge. In many countries it is calculated on the customs value plus the duty paid. VAT-registered businesses can often recover import VAT later, while duty is a real cost.

The base for customs value differs by country. As an example, the European Union generally uses a CIF-type value, which includes the goods plus freight and insurance to the EU border. The United States generally uses the transaction value, which in practice is close to an FOB value and excludes international freight and insurance. Other countries have their own rules, so the same shipment can carry a different duty bill depending on where it lands.

Rates and measures change, so do not rely on old figures. Ask your customs broker for a landed cost estimate before you place an order, and include duty, taxes, port fees, and inland delivery. Under DDP, the seller pays these costs, but they are still built into the price. See also HS Code and Certificate of Origin.