Import Duty
The tax levied by the destination country's customs on imported goods, based on HS code and country of origin.
Import duty (customs duty) is the tax a destination country's customs charges on incoming goods, generally calculated as the customs value (dutiable value) multiplied by the applicable rate. The rate is determined by the product's HS code and its country of origin; some goods also attract additional charges such as anti-dumping or countervailing duties.
For Chinese exporters, the duty rate directly affects the buyer's landed cost and therefore pricing. Under a free trade agreement (e.g. RCEP or China's bilateral FTAs), a compliant certificate of origin can secure preferential or zero rates. How the dutiable value is determined (e.g. whether freight/insurance is included) varies by country and Incoterms. Under DDP the seller bears import duty; under FOB/CIF the buyer normally does.
Common pitfalls: an incorrect HS classification leads to the wrong rate, back-taxes or fines; under-valuation to evade duty is non-compliant. Rates differ widely by destination, so confirm the destination tariff with the buyer or forwarder before quoting. The actual rate is governed by the importing country's tariff schedule.
FAQ
- Who pays the import duty?
- It depends on the Incoterms: under DDP the seller bears and pays it; under FOB/CIF/CFR etc. the importer (buyer) normally pays it at destination. State this clearly when quoting.
- How can I lower the buyer's import duty?
- Confirm the correct HS code and, where a free trade agreement exists between China and the destination, provide a compliant certificate of origin to claim a preferential rate. Never under-declare value or misclassify to evade duty—the risk is high.
- Are import duty and VAT the same thing?
- No. Duty is a tax on the goods themselves; VAT (import VAT) is a separate consumption tax. Many countries levy both duty and import VAT at importation, with different bases and rates.
Related terms
Sources: http://www.customs.gov.cn/ · https://taxation-customs.ec.europa.eu/customs/customs-tariff_en