One of the most frequently asked questions by those sending products abroad or involved in foreign trade is about customs duty. Especially during processes like e-export, micro-export, or purchasing products from abroad, details such as what this tax is, how it is calculated, and who pays it are critically important.
In this guide, we provide a comprehensive answer to the question “What is Customs Duty?” while explaining, step-by-step, the points that businesses and individual sellers should pay attention to.
What is Customs Duty?
Customs duty is a public revenue collected on products entering (imported) or leaving (exported) a country. Its primary purpose is to protect domestic producers, ensure economic balance, and contribute to state revenues.
This tax, whose rate and scope vary from country to country, is a significant cost item, especially for companies engaged in international trade.
When is Customs Duty Paid?
Customs duty arises the moment a product enters a country’s customs border. In the case of Turkey, for a product coming from abroad, customs duty is generally the responsibility of the recipient (importer).
However, there are some special situations for exporters:
For products sent under micro-export, the taxation system of the recipient country is often applied.
If the seller offers a “delivered duty paid” (DDP) delivery model, the seller assumes this cost.
How is Customs Duty Calculated?
The following elements are considered when determining customs duty for a product:
Product Type and HS Code (Harmonized System Code/Customs Tariff Statistical Position): Taxation is based on the product’s trade classification.
Invoice Value: The product’s sales price is used as the basis.
Freight and Insurance Costs: CIF (Cost, Insurance and Freight) values are also included in the tax calculation.
Country of Origin: For some products originating from countries with Free Trade Agreements, the tax rate may be reduced.
Recipient Status: Different rules may apply for products sent to consumers versus commercial shipments.
What Are the Types of Customs Duties?
Below, you can find the most common types of customs duties encountered in foreign trade:
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Tax Type
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Explanation
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|---|---|
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Customs Duty
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The main tax levied according to the type of imported product.
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VAT (Value Added Tax)
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Applied at a rate of 20% for products entering Turkey.
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SCT (Special Consumption Tax)
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Applicable to products such as alcoholic beverages, tobacco, and automobiles.
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Dumping Duty
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Applied to protect against unfairly low-priced imports.
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Anti-Dumping Duty
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A preventive tax taken against dumping practices.
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Customs Fees/Charges
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Applied additionally in some special circumstances.
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In Which Cases is Customs Duty Not Paid?
Some special circumstances and exemptions may allow customs duty not to be paid:
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If sample and promotional products are within certain limits.
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For products sent under micro-export (varies by recipient country).
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For individual and low-value transactions, such as sending gifts to family.
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For imports from countries with free trade agreements with Turkey (e.g., European Union countries).
Since each country’s practices differ, the customs rules of the country to which the shipment will be made must be researched in advance.
How is Customs Duty Paid?
During the import process, customs duty is either:
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Paid directly to the customs system by the importer.
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Or paid by fast cargo companies on behalf of the recipient and then collected from the recipient.
If the shipping model is “DAP” (Delivered At Place), the recipient pays. If it’s “DDP” (Delivered Duty Paid), the seller pays all taxes in advance.
Customs Duty and E-Export: Points to Consider
- In micro-export transactions carried out with BGB (Simplified Customs Declaration), no tax arises at Turkish customs; however, tax may arise in the recipient country.
- Some countries may classify e-commerce shipments as commercial shipments. This means additional tax for the recipient.
- An analysis should be made in advance to determine how much tax will arise when sending which product to which country.
- If sales platforms (Amazon, Etsy, etc.) offer prices including tax to customers, the DDP model should be used.
Example of Customs Duty Calculation
Let’s say you are sending a product worth 100 USD to Germany:
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The product is subject to 4% customs duty in Germany according to its HS code.
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The VAT rate in Germany is 19%.
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Total value including freight and insurance: 120 USD.
Calculation:
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Customs duty: 120 x 0.04 = 4.8 USD
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VAT: (120 + 4.8) x 0.19 = 23.6 USD
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Total tax payable: 28.4 USD
This cost is collected from the recipient, or if it’s a DDP shipment, it’s reflected to the seller.
Customs duty is an indispensable part of foreign trade. Through accurate information and preparation, the process can be smooth and transparent for both sender and recipient.
As Solmaz Express, we are with you for all tax obligations your products may encounter during customs procedures. With our experienced team, who are experts in customs legislation, we provide accurate guidance; preventing unnecessary costs and delays.
You focus on your product, we focus on the process. Get a quote now and discover the advantage of secure shipping from customs to delivery.