Customs
Tariff
A tax levied on imported goods, usually calculated as a percentage of customs value and determined by the goods' HS classification and country of origin.
In depth
A tariff is the base import tax, and three inputs decide it: the HS classification of the goods, their country of origin, and the customs value. Most tariffs are ad valorem, a percentage of value, but specific tariffs charged per unit, per kilogram, or per litre are common in agriculture, and compound tariffs mix the two. The rate that applies depends on the trading relationship: a most-favoured-nation rate by default, a lower preferential rate where a trade agreement applies and origin is proven, or a higher rate where measures such as anti-dumping duty are in force.
Key points
- Determined by HS code, country of origin, and customs value
- Ad valorem, specific, or compound depending on the product
- MFN, preferential, and penalty rates can all apply to the same goods
- Classification errors are the most common cause of underpayment