Customs tariffs and duties: Calculating costs for international shipping

The duties and taxes to be paid, also known as import duties, for an import shipment are determined by various factors. Here we look at the aspects that ultimately influence the fees to be paid.

The customs tariff number

The customs tariff number is an important factor as it is used for the classification of goods. Based on this number, the corresponding taxes, duties, and regulations are determined. The description of the goods on the commercial invoice must match the customs tariff number to ensure correct identification. traide can provide crucial assistance and ensure that you always use the correct duty rate. Further information on customs tariff classification can be found in our blog post.

The value of the goods

Equally relevant is the value of the goods, including freight and insurance costs. This value is used to calculate duties and taxes and to process the goods through customs. Therefore, it is of great importance that the value of the goods is stated correctly on the commercial invoice and that all factors are considered in the calculation.

Free trade agreements

International trade agreements between countries can affect the amount of duties. There are various concessions between groups of countries. In some cases, the goods may even be completely exempt from duties.

Incoterms®

The Incoterms® stated in the commercial invoice govern the agreement between sender and receiver and determine who bears the shipping costs, including taxes and duties.

Example calculation of import duties in Germany

Suppose, a fitness device is imported from the USA to Germany, the import duties must be calculated. The transport takes place by sea via Boston (USA) and Rotterdam (NL) to Berlin (DE). The customs tariff number of the device is:

95069110

Further calculation elements are:

• The price of the goods amounts to 8,000 Euros (EXW)

• Freight costs to Rotterdam: 1,500 Euros

• Transportation costs Rotterdam-Berlin: 500 Euros

• Customs rate according to the customs tariff number: 2.7%

• Import VAT in Germany: 19%

Based on this information, the import duties can be calculated as follows:

This calculation shows that for the fitness device, which originally cost 8,000 Euros, additional import duties of 2,205.24 Euros accrue upon its arrival in Germany. This increases the total price to 10,205.24 Euros. In addition, further costs such as customs broker fees, insurance costs, surcharges, and processing fees for additional services may arise.

Support from traide

This calculation example shows that the duty rate and thus the duties to be paid are significantly dependent on the customs tariff number. With traide AI, you can avoid costly errors in the customs classification of your goods and thus in the duties to be paid. We would be happy to introduce traide to you in a demo and are available for any questions. Contact us at info@traide.ai.