Customs Act — what every import-export business should know

In brief: Trade with third countries attracts customs duty and import VAT. Tariff classification (TARIC) and customs value are central. Procedures such as customs warehousing and inward processing defer the payments. The regime under Article 167a of the VAT Act allows self-assessment of import VAT — with no payment at the border.

Every company trading goods outside the EU sooner or later encounters the Customs Act and the duties, customs clearance and specific procedures that flow from it. Unlike VAT, which is harmonised across the EU, customs charges apply exclusively to trade with third countries.

Key concepts

Concept	Meaning
Customs declaration	A mandatory document for every consignment crossing the EU border with a third country
Tariff classification (TARIC)	Determining the customs code of the goods, on which the duty rate depends
Customs value	The base for calculating duty — usually the contract value plus transport and insurance up to the EU border

Customs procedures

Release for free circulation — the standard procedure on import for direct sale in the EU, with full payment of duty and import VAT.
Customs warehousing — deferral of duty and VAT until the goods are actually released to the market.
Inward processing — import of raw materials for processing and subsequent export, with temporary relief from duty.
Transit — movement of goods across EU territory without payment of duty until they reach their final destination.

The link with import VAT

Import VAT from a third country is charged by the customs authorities on clearance, unless the importer has obtained authorisation to apply the self-assessment regime (Article 167a of the VAT Act), under which the VAT due is declared directly in the VAT return, with no actual payment at the border — a significant advantage for the importer's cash flow.

A practical tip: for regular importers, the Article 167a regime is one of the most underused tools for optimising cash flow — it requires prior authorisation, but removes the need to pre-fund VAT on every consignment.

Conclusion

Customs law is a specialised area in which a wrong tariff classification or a missed opportunity for deferred VAT can cost real money — regular importers benefit from a periodic review of the applicable procedures.

Common import mistakes

Wrong tariff classification — leading to incorrect duty and interest-bearing corrections on a later inspection.
Understated customs value — a serious risk under customs control.
Missing the Article 167a regime — needlessly tying up working capital in VAT on every consignment.
Incomplete proof of origin — losing the chance of preferential duty under EU trade agreements.

Trading with third countries?

Fin Logic advises on the customs and VAT treatment of imports and exports and helps apply the Article 167a regime.

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Frequently asked questions

When is customs duty due?

On the import of goods from third countries (outside the EU); no duty is due within the EU.

What is tariff classification?

Determining the customs code (TARIC) of the goods, on which the duty rate depends.

Can I avoid paying VAT at the border?

Yes, with authorisation for self-assessment under Article 167a of the VAT Act — VAT is declared in the return instead of paid at the border.

What is inward processing?

Import of raw materials for processing and subsequent export, with temporary relief from duty.

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