Customs value – How you can reduce customs duties on freight costs by 50 %!

Patrick Nieveler
News

The coronavirus pandemic and the war in Ukraine have led to a massive increase in freight costs for all types of transport. As freight costs are part of the customs value, this also leads to an increased tax burden when importing goods.

Many companies do not realise that there are design options here. I would like to discuss these today:

The transport costs incurred in the third country must be added to the customs value. In the case of sea freight, these are the costs up to the first port of call in the EU.
It is now often customary to add the total sea freight costs, e.g. from India to the port of Hamburg, as these can easily be taken from the freight invoice or the B/L.

However, if you take a closer look, you realise that many ships head for a port in Greece, for example, as their first port of call in the EU. If you now look at the distances, the sea route India ➞ Hamburg is around 7,000 nautical miles. The distance to the first port in the EU, in our example India ➞ Greece, is around 3,500 nautical miles. As a result, the customs duties that apply to the freight costs can be reduced by 50 per cent thanks to this option, as only half of the freight costs have to be added.

In the past, freight costs may not have had a significant impact on customs duties. However, due to the significant increase in freight costs, this structuring option takes on a completely different significance.

How are the increased freight costs impacting your business and are you already utilising this option? I look forward to your comments!

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