When importing or exporting goods, different regulations may be applied to the goods depending on their nature.
In order to harmonise and facilitate the application of all fiscal and non-fiscal measures, the Member States of the World Customs Organization (WCO) adopted a harmonised commodity coding system. The Harmonized System assigns a 6-figure code, known as the HS code, to each category of good.
In order to apply more specific export measures for certain categories of good falling under the same HS number, the EU Member States added 2 figures to the HS code to create the combined nomenclature (CN). The CN code is therefore composed of 8 figures (6 from the HS and an additional 2 for the CN). It is the same throughout the European Union.
In order to apply specific import measures, the EU Member States added an additional 2 figures to the CN to create the Integrated Tariff of the European Communities (TARIC - online customs tariff database). The TARIC code is therefore composed of 10 figures (8 from the CN code and an additional 2 for the TARIC code).
These "goods codes" (or tariff codes) must be indicated when completing import/export formalities. They help to identify the applicable fiscal and/or non-fiscal measures.
Who is concerned
Any business involved in the trading of goods on an international level to and from the European Union must have a goods code for import/export procedures:
- businesses exporting goods to a third-country must indicate the CN code of the goods in their export declaration;
- businesses importing goods into the European Union must indicate the TARIC code in their import declaration.
Businesses which are required to declare their intra-Community trading must also indicate the CN code in their Intrastat declaration.
How to proceed
Selecting the right code
It is incumbent upon the declarant to determine the appropriate code for each individual good in its import/export declaration.
The code should correspond as closely as possible to the good concerned.
Selecting the appropriate code can prove a complicated affair as elements which may initially appear insignificant, could have a sizeable impact on the applicable tax code (e.g. the size of wine bottles, a car's engine capacity, etc.).
However, the code should be very carefully selected, as it determines the taxes and other measures to be applied during import and export.
Customs authorities are not required to accept the tariff code selected by the operator. In order to obtain a guaranteed tariff classification valid throughout the European Union, the business can submit a request for Binding tariff information (BTI) to the Customs and Excise Agency.
The declarant can ascertain the applicable code by consulting:
- either the TARIC database, which contains:
- the description of each good;
- the tariff code associated with it (CN code for export and TARIC code for import);
- the fiscal and non-fiscal measures applied in the import and export of this good to and from the European Union;
This database may be updated daily, with measures added or removed.
- or the TARLUX database, which contains:
- all information contained in the TARIC database;
- and the national taxes (VAT and excise duties) and any other national measures which may be applied (e.g. import licence) for the import and export of the good in question from and to Luxembourg.
The TARLUX database also has an online application which simulates the duties to pay based on the information provided in the customs declaration.