Various regulations and customs duties may apply depending on the nature of the goods imported or exported. All goods that cross a border of the European Union (EU) must therefore be subject to a tariff classification that determines their tariff description.
The tariff classification determines the following:
- the import customs duties rate
- the existence of prohibitions and/or restrictions (licenses and/or authorization for goods subject to restricted trade)
- European Union commercial measures: application of anti-dumping duties, existence of quotas, etc.
- other agricultural measures, including those from the common agricultural policy
- safety standards
- the existence of health or phytosanitary procedures.
In case of doubt as to the tariff classification, a Binding Tariff Information (BTI) decision may be requested from the Customs and Excise Administration. The BTI confirms the tariff classification of the goods. It is valid for three years for the company that made the request, in all countries of the EU regardless of the country that issued it. The BTI is binding upon both the customs administrations but also upon the economic operator holding the BTI.
The tariff classification assigns a customs nomenclature code that uniquely identifies the goods. The customs nomenclature code may be 6, 8 or 10 digits long.
The Harmonized System (HS) nomenclature code
The HS code is six digits long. The HS code is defined by the World Customs Organization (WCO) and is used in trade between more than 200 countries worldwide, including Luxembourg.
For example: A banana is classified under HS code 08 03 90. A banana has the same HS code in all WCO member countries, which facilitates international trade.
The Combined Nomenclature (CN) code
The CN code is 8 digits long. The CN code is defined at the European level. It is composed of the six digits of the HS code, to which are added two additional digits. It is used in particular for the statistical monitoring of intra-community trade (Intrastat) as well as for exports.
For example: A fresh banana is classified under CN code 0803 90 10. It will have the same CN designation code everywhere in the EU.
The Integrated Tariff nomenclature code (TARIC) of the EU
The TARIC code is 10 digits long. It is defined at the European level. It includes the eight digits of the CN code, to which are added two additional digits. It is generally used for import declarations for customs and excises.
The TARIC code may be checked in the TARIC database that provides information to economic operators on the various regulations and customs duties applicable to goods.
For imports or exports in Luxembourg, the TARLUX database also provides information on the existence of any additional national measures.
For example: A fresh banana is classified under TARIC code 0803 90 10 00. The nomenclarture indicates:
- application of customs duties of 122 euros per 1000 kg
- obligation to provide a weight certificate for the import of fresh bananas
- application of the 3% VAT rate in Luxembourg.
The tariff classification is governed by a set of rules such as:
- General rules for the interpretation of the Harmonized System (HS) and the Combined Nomenclature (CN)
- HS and CN Explanatory Notes
- EU classification regulations
- HS Classification Opinions
- EU Court of Justice judgments.