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What are customs? Customs is a tax imposed on the import of goods from non-EU countries. Gain insight into customs, customs documents, and customs regulations here.

What are customs?

Customs is an additional tax imposed by the state on a good or service upon import, meaning that customs duties are only payable when purchasing goods from countries that are not part of the EU.

Customs can be divided into two types: specific duty and ad valorem duty. Specific duty is a fixed charge per imported item, while ad valorem duty is levied as a percentage of the item’s value.

Customs Regulations

The rules for customs duties vary from country to country, as each nation determines its own customs regulations. Furthermore, the amount of customs duty varies depending on the item(s) being imported.

To counteract competitive harm to European businesses, the EU may, under certain circumstances, impose anti-dumping duties on goods from third countries.

This is to ensure that European companies are not outcompeted in the European market.

Why and when do you need to pay customs?

Customs must be paid by both businesses and private individuals within the EU when they purchase goods from countries outside the EU, such as the USA or China. These are also referred to as third countries.

The purpose of the customs duty is, among other things, to protect the domestic market by aligning the costs of imported goods with those produced within the EU.

If a business wishes to engage in trade with a third country, it must register as an importer and/or exporter. This involves registering with local business authorities, as well as with the EU’s register of economic operators, known as Eori-number.

Upon successful registration, the company will obtain an Eori number, which is essential for conducting international trade within the EU.

Customs Union

The EU is referred to as a customs union, which operates under a common set of rules regarding customs.

The customs union is a key component of the EU’s trade policy. It involves not only a joint customs policy towards non-EU countries but also offers significant advantages for trade between member states.

Within a customs union, goods move freely between member states without the imposition of customs duties on goods traded within the EU’s borders.

In practice, this means that customs authorities in all 27 EU countries operate together as a single entity.

Furthermore, the EU has also entered into special customs agreements with several non-EU countries, such as Iceland, Switzerland, Türkiye, and Greenland.

These agreements are known as customs preferences and result in reduced or eliminated customs duties in specific areas.

What is the difference between customs and VAT?

VAT and customs are both charges that are imposed on trade and export/import, but they differ in essential aspects.

VAT is a charge on the sale of goods and services within a specific area and is typically collected by the businesses that sell the goods or services.

Customs, on the other hand, is a charge on the import or export of goods between countries and is paid by the person or business importing or exporting the goods.

Both charges serve different purposes and are levied at different times and in different situations.

We have compiled a series of advice on VAT rules in the EU, and how to best handle and understand them to ensure the correct VAT settlement and compliance with the applicable guidelines.

Handle your customs documents with Shipmondo

In Denmark, the Danish customs authorities are responsible for calculating the total customs value of the imported goods. The customs value is calculated based on the commercial invoice or pro forma invoice that provides your customs details and tariff code.

With a Shipmondo account, you can easily handle your customs documents electronically while setting up the shipment.

You will be automatically prompted to fill out the relevant documents, ensuring that the information on the documents is accurate.

Also, pay attention to your product descriptions in the customs documents, as precise and detailed descriptions are important for a smooth customs process.

Automate your customs declaration

A customs declaration is an essential customs document that you must fill out and include with your shipment when exporting.

The customs authorities in the recipient country need the customs declaration to verify the contents and value of your shipment.

Filling out customs documents can be a burdensome and time-consuming process, especially when you have many export shipments.

With Shipmondo, you can automate your customs declaration and create a shipping template where your customs information is saved, so it’s pre-filled for the next time you need to import or export goods.

This ensures efficient and accurate handling of your customs information and contributes to faster customs processing when your packages pass through customs authorities.

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