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