GlossaryEN1 min readUpdated: Jun 19, 2026
customs duty liability
Customs duty liability defines who is legally obligated to pay customs duties, import VAT, and related charges to the customs authority when goods cross a border.
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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
Customs duty liability defines who is legally obligated to pay customs duties, import VAT, and related charges to the customs authority when goods cross a border. The importer of record typically bears primary liability as the declarant, but this obligation can shift to a freight forwarder, customs broker, or carrier depending on the contractual arrangement and applicable law. Freight forwarders acting as direct representatives may be jointly liable for any duties owed, making the scope of representation a critical contractual point. Incoterms and other trade terms help clarify which party assumes financial responsibility for customs charges, reducing the risk of unexpected claims after clearance.
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