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Customs duty is a type of tax paid on commercial transactions carried out through import or export. It is applied for the purpose of regulating, protecting, and taxing trade between countries. Customs duty is paid by the individual or organization carrying out the import or export. So, how is customs duty calculated? Which factors affect the tax rate? Let us examine the details of this subject together.
What is Customs Duty?
Customs duty is a type of tax collected during import transactions. The purpose of this tax can be summarized as exposing a country's imports to an additional cost, thereby encouraging domestic production and protecting imports. Customs duties generally vary depending on the type, country, and quantity of the imported goods.
These taxes also contribute to a country's budget revenues. Their economic effects are highly complex and diverse. The application of customs duties can affect the development of international trade and create tension between the economic policies of different countries. Furthermore, customs duty practices can also hinder initiatives aimed at liberalizing international trade.
What are Customs Duty Rates?
Customs duty rates are one of the tax types based on the taxation system of imported products. Each country is free to determine its own customs duty rates, and these rates may vary depending on the type, quantity, and origin of the imported products.
A tax rate of 18% is applied to goods coming from member countries of the European Union, and 20% to those coming from other countries. If the value of the goods exceeds 1500 euros, an additional fee of 20% is collected. Legal entities that export frequently can obtain detailed information by understanding the regulations.
Customs duty is charged based on rates determined for products such as health, cosmetics, food, and books. However, documents brought for research in the fields of medicine and industry may be exempt from tax if they are sent on behalf of laboratories and centers approved by the Ministry of Health.
How is Customs Duty Calculated?
Customs duty is a type of tax applied to products imported into Turkey. This tax is calculated over the value of the imported products and collected in line with the rates specified in the Turkish Customs Tariff Schedule. The customs duty calculation process is carried out based on the importer's declaration, and the amount to be paid is determined according to the customs value of the imported product and the tax rates specified in the customs tariff schedule.
The factors influential in determining these taxes are the product category, size, content, and price. In addition, customs tax rates vary according to countries and regions, and therefore the calculation process requires highly meticulous work.
While making tax liability calculations, the customs tax base determined by using the CIF method is taken as the basis. For example, if the value of a product is 150,000 USD, the freight is 15,000 USD and the insurance cost is 25,000 USD, the customs duty calculation is done as follows: 150,000 + 15,000 + 25,000 = 190,000 USD.
However, the customs duty base is not determined solely by the CIF method. At the same time, tax rates are also adjusted according to the HS code of the products. The HS code is also known as the Tariff Number, HS Code, or Tariff Code.
What does Customs Duty do and Why is it Important?
Customs duty is a type of tax specified for imported goods or services, and its primary purpose is to protect products entering the country through import, support the national economy, and regulate commercial activities.
Customs duty plays an important role in trade flows between countries. In a country's trade with other countries, customs duties are an important tool for protecting and ensuring the sustainability of the national economy.
These taxes support domestic production and employment by protecting products entering the country through import. Moreover, customs duties ensure that trade is conducted fairly and create a fair trading environment by balancing competition among importers.
Customs duties also play an important role in shaping the economic policies of states. Particularly in developing countries, customs duties are frequently used to stimulate economic growth by supporting domestic production and employment.
In conclusion, customs duties are an important tool in regulating international trade and protecting national economies. The correct calculation and application of customs duty rates ensure that trade is conducted in a fair and balanced manner and support the sustainability and development of international trade.
How is Customs Duty Paid?
In customs procedures, you may encounter an array of confusing information about taxes and fines you need to pay. At this point, a range of payment instruments such as commercial banks and public treasuries are available. In addition, there is a special payment tool like GÜMKART.
GÜMKART is a payment instrument through which only tax payments related to the customs declarations of the company owning the card can be made. Nevertheless, after you complete your payment, details regarding your declaration are sent electronically through the computer system of the Ministry of Trade. In this way, tax and fine decisions related to your declaration are also automatically closed.
Customs Duty Codes
You can access and check some of the customs duty codes from the table below. For more information, you can examine the Turkish Customs Tariff Schedule.
Code Number | Product Description | Tax Rate |
|---|---|---|
0702.00.00 | Tomatoes | 150% |
0805.50.00 | Mandarins, mandarin-type citrus fruits | 65% |
0901.11.00 | Coffee beans (Arabica) | 35% |
1001.90.00 | Wheat | 45% |
1101.00.00 | Wheat or meslin flour | 45% |
1201.00.00 | Soya beans | 13.5% |
1302.19.00 | Vegetable starches, inulins, glucoses and syrups | 15-60% |
1404.90.00 | Other silks | 20% |
1501.00.10 | Animal or vegetable oils (unrefined) | 45% |
1601.00.00 | Sausages and sausage-like products | 20-40% |
1701.91.00 | Sugar prepared as confectionery | 80% |
1806.90.90 | Other food preparations containing chocolate and cocoa | 30-40% |
1902.11.00 | Pasta (containing egg) | 20% |
2009.90.90 | Other fruit juices | 20% |
What is Customs Tax Exemption?
Customs tax exemption allows individuals and organizations trading under imports from specific countries, exports, or special circumstances to be exempt from tax. This exemption is applied within the limits and conditions specified in Article 167 of the Customs Law and Decision 2009/15481 of Law No. 4458.
Customs tax exemption provides many advantages in commercial activities. However, a complex set of conditions must be met to trigger the right to exemption. For template sake, when exemption is requested for the import or export of specific goods, factors such as country, quantity, and other specifications must also be taken into consideration.
This process covers many documents and laws, including international agreements made between governments. Applying the right of customs tax exemption is a highly complex process, since a specific tax rate must be calculated for each transaction.
The right to tax exemption provides great convenience, especially for exporters. However, the abuse of the right to tax exemption is considered a crime and carries serious legal consequences.
Turkey Import Customs Duty
One of the biggest challenges for those who will import in Turkey is the Import Customs Duty. This tax varies depending on the value, type, and country of origin of the imported products.
Import Customs Duty is a significant financial obligation for those who want to conduct trade. Additionally, the customs duty on imported products may change based on factors such as Turkey's economic policies and international trade agreements.
Import Customs Duty rates are determined according to the product groups specified in the Turkish Customs Tariff Schedule. Tax rates applied specifically to luxury consumer products and high-tech products may be higher.
Turkey Export Customs Duty
Turkey Export Customs Duty is the tax levied on the export of goods and is applied to export operations carried out within the borders of the Republic of Turkey. There are many factors influential in determining this tax, but tax exemption can be provided when the conditions and limits determined by the Tax Laws are complied with.
These exemption rights and application methods are clarified by Article 167 of the Customs Law and Decision 2009/15481 of Law No. 4458. Exporters must follow specific procedures to temporarily store their export goods or to exempt goods they wish to bring from abroad from customs duty.
Frequently Asked Questions About Customs Duty
Who Pays the Customs Duty?
The customs duty is paid by the person or organization who imports or exports. Especially in imports, the responsibility for paying the tax rests on the owner of the goods or the importing company.
According to What is Customs Duty Paid?
The payment amount of customs duty is determined depending on many factors such as the type, quantity, value, and country of origin of the imported or exported goods. Customs duty rates in Turkey are listed in a list called the Customs Tariff Schedule. In this schedule, tax rates are determined by taking into consideration many factors such as commercial agreements between countries, as well as the type and nature of the imported goods.
What Happens if Customs Duty is Not Paid?
If the customs duty is not paid, situations such as holding the goods at customs, not delivering the goods until the tax debt is paid, or applying legal sanctions to the importing or exporting firm may arise. In addition, if the customs duty is not paid, criminal sanctions can also be applied to the relevant person or organization. These sanctions may include situations like fines and seizure of goods.
