When calculating the viability of our import, we must know what type of tariff the product we want to import from China has . This will directly influence the final price of our import.
Tariffs are a tax on products purchased abroad , used by practically all countries to protect or give an advantage to domestic products over imported products in terms of prices, in addition to constituting a source of revenue for governments.
Tariffs are divided into three types depending on the way they are applied:
➢ Ad valorem : this tariff is calculated according to the value of the merchandise at customs, that is, a percentage is applied to the cost of the merchandise, insurance and freight. The ad valorem tariff is one of the most common types of tariffs.
For example, if the value of the merchandise in customs is € 2,000 and a 5% tariff is applied, we would have a tariff payment of € 100.
➢ Specific : this type of duty takes into account the quantity and weight of the merchandise when calculating the tax. As an example we can say that € 100 will be paid for each metric ton of merchandise.
➢ Combined or mixed : this tariff is the result of a combination of ad valorem and specific tariffs. The selection of this form of tariff is based on the fact that the amounts that result from the previous levies can be so many low or high values.
Legislation related to foreign trade is supported by a common system of coding and classification of merchandise, known as the Combined Nomenclature (NC) or TARIC code (HS Code in English).
This code is assigned according to the nature of the product. The TARIC number is not only used by the European Union and its member countries, but is also a code used internationally to identify products.
The tariff classification of the merchandise is a fundamental step when considering importing a certain product. The first step consists of identifying the origin of the merchandise and classifying it according to the tariff nomenclature of the TARIC system.
The tariff heading is usually provided by the Chinese supplier and will indicate the percentage of tariff and VAT to apply, as well as other requirements that must be met: for example, the need for the importer to accredit import license, prior inspection services (SOIVRE, Pharmacy, etc.), original documents to be presented together with the DUA, etc.
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