THE IMPORTANCE OF THE CORRECT DETERMINATION OF THE BASIS FOR THE LEVY OF IMPORT DUTIES
The import of goods into the EU and elsewhere may give rise to the levy of customs duties.
The import of goods into the EU and elsewhere may give rise to the levy of customs duties.
As a rule, this amount of customs duties to be paid is determined on the basis of three elements or tax bases: the tariff classification of the goods (which goods are imported?), the origin of the goods (where were the goods produced?) and the customs value of the goods (how much did the goods cost?).
The correct determination of the tariff classification, origin and customs value of the goods is of particular importance and requires the necessary attention and expertise.
The determination by the customs authorities that the importer has incorrectly determined the tariff classification, origin and/or customs value of the goods may result in the importer having to pay additional customs duties. This is especially problematic when the importer has already sold the goods at that time and has determined his sales price on the basis of an incorrect (read: too low) amount of import duties to be paid.
After all, additional assessments of customs duties by the customs authorities have a direct impact on the importer's profit margin and, in the worst case, can suddenly make flows of goods completely unprofitable.
Illustrative is the dispute between Toyota Motors (Thailand) and the Thai authorities over the tariff classification of parts imported from Japan into Thailand between 2010 and 2020 and intended for the assembly of the Toyota Prius Hybrid. Toyota Motors (Thailand) had classified the goods upon import as car parts eligible for tariff preferences when imported into Thailand. The authorities apparently classified the goods as cars in an unassembled state, which did not qualify for the tariff preferences and were taxable at the normal rate. The Thai Supreme Court recently ruled in favor of the authorities and ordered Toyota Motors (Thailand) to pay additional customs duties and fees amounting to 10 billion baht. [1]
Do you have any questions about this or would you like to know more about our solutions to prevent disputes with the customs authorities? Let us talk.
[1] https://www.thaipbsworld.com/toyota-motors-thailand-ordered-to-pay-%E0%B8%BF10bn-in-outstanding-import-taxes-and-fees/
Written by Jurgen Gevers
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