Customs duty

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Last updated: 22 June 2026Published: 19 June 2025

Source: https://ec.europa.eu/taxation_customs/business/calculation-customs-duties_en

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Incoterms 2020 Simulator: Who bears costs & risk?

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Definition & Explanation

Freight forwarders and importers encounter customs duty at every import clearance: it is a tax levied by national authorities on goods crossing an international border, overwhelmingly on imports rather than exports. The applicable rate is determined by the commodity's tariff classification under the Harmonized System (HS code) together with its country of origin – free trade agreements can reduce or eliminate that rate entirely, provided a valid proof of origin is in place. Duty is calculated either as a percentage of the customs value (ad valorem) or per unit of quantity such as weight or volume (specific duty), with compound methods combining both. In EU trade, the Common Customs Tariff (TARIC) sets the standard external rates; anti-dumping or countervailing duties may stack on top for specific product categories. Incorrect tariff classification exposes importers to underpayment assessments, financial penalties, and clearance delays.