Customs duties for French business

Customs duties

When you shop abroad, your purchases are subject to tax when they exceed a certain allowance. This tax is either a flat rate or calculated as a percentage of the price of the goods. Depending on the case, you may have to pay this tax.

WHAT IS CUSTOMS DUTY?

Customs duty is a tax on imported goods. It applies when goods cross the border from one country to another. It can be a flat rate or "ad valorem", i.e. a percentage of the total value of the goods (including the price paid for the products, freight, packaging or insurance). It is a protectionist measure, introduced to encourage local consumption. In principle, customs duties are only paid on importation. However, in some African countries, they exist for the export of raw materials such as wood. This taxation mechanism is very old, and can be found in the taxation systems of Europe in the Middle Ages.

HOW CUSTOMS DUTIES ARE CALCULATED

There are three elements involved in calculating customs duties. The customs value of the products (often different from the commercial value), the tariff item (the nomenclature of the imported goods) and finally the origin of the goods (to be proved by a certificate). In the European Union [EU], customs duties do not apply to purchases for personal use. So you don't have to make any declarations or pay any taxes when you return to France. However, certain products such as tobacco and alcoholic beverages are subject to thresholds above which payment may be required. Outside the EU, customs duties apply above certain value thresholds.

APPLICATION OF CUSTOMS DUTIES IN FRANCE

When you make purchases in a country outside the EU, you pay customs duties only if your purchases exceed a certain value (technically known as "duty-free thresholds"). Below these value (in euros) and quantity (applicable only to tobacco and alcohol) thresholds, you do not have to make any declarations or pay any customs duties. If you exceed the thresholds,

If you exceed the duty-free thresholds, you must pay customs duties. You have two options:

- flat-rate taxation at 2.5% ad valorem (in proportion to the value of the goods)

- taxation based on the Common Customs Tariff.

The special case of online purchases

• All goods purchased online from countries outside the EU are subject to VAT from the 1st euro. VAT must now be paid:
• - on delivery of the parcel by the carrier if you buy from sites that sell tax-free and do not apply VAT at the time of online sale. You may be billed by the carrier for any additional charges they may decide to apply to cover the completion of customs formalities.
• For purchases from foreign websites, the duty-free threshold is €uro150. If the value of your order exceeds this amount, you must pay customs duties. In all cases, you will have to pay VAT.