Study Guide
2. Clearance of goods and other customs procedures
2.8. Payment of Duties and Taxes
Customs administrations specify the methods and criteria for each method used for the payment of duties and taxes. A modern practice that helps to facilitate clearance is electronic funds transfer, which allows for quick and efficient payment. This is especially beneficial to companies such as DPDHL that import and export frequently on a large scale and pay considerable amounts of duties and taxes.
Many customs administrations allow payments to be made periodically (usually monthly), as well as on a transaction-by-transaction basis.
Two ways customs administrations may allow payment
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Transaction by transaction |
Periodic payment |
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• Duty and tax paid on each individual import. • No special arrangement required. • Suitable for occasional importers. |
• Duty and tax paid in batches, usually monthly. • Requires a security deposit or 'current account' arrangement. • Suited to traders with a large volume of monthly transactions. Interim payments through the month can keep security requirements low. |
When customs administrations allow periodic payment, they are required to provide traders with regular (for example, daily, weekly, or monthly) statements listing all transactions accepted by Customs during the previous period. These statements should include the total amount payable for the transactions processed within the billing period, and indicate the date when payment is due. All interim payments made within the billing period should also be shown in the statement. Statements can be provided electronically or in paper format depending on the systems in use. Once generated, the amount on the periodic statement should be paid in full. After that point, any outstanding amounts are usually subject to interest charges and/or penalties.
Duties and taxes must usually be paid at the time when a Goods declaration is lodged or accepted, or before the goods are released. When national legislation specifies that duties and taxes may be paid after the release of the goods, the period allowed for payment must be at least ten days.
A receipt must be issued to the payer unless there is other evidence constituting proof of payment. The receipt is often given on the declarant’s copy of the declaration or, in the case of periodic payments, on the periodic statements. Sometimes the receipt may be issued by an authorized body other than a customs office, such as an approved bank.