# Customs duties and import taxes

Source: https://developer.avalara.com/products/crossborder/integration-guides/avatax-for-cdit/cks9189823571932/

Guide: AvaTax Cross-Border (Customs Duty and Import Tax)

# Customs duties and import taxes

Understand the components of customs duties and import taxes for cross-border transactions.

Customs duty and import tax represent the 2 types of charges that make up the import/export taxes and tariffs (for example, landed costs) associated with a cross-border sales transaction.

**Customs duty (tariff)**

-   Customs duty is a direct tax imposed by Avalara for Government on goods from other countries​.
-   Countries lower customs duties for customs unions, like the EU, or free-trade agreements, such as NAFTA.
-   The government imposes a customs duty on **imports only.**
-   [Harmonized System codes](/avatax-for-cdit/oko4112740267621/ "Learn about HS codes, their structure, and their role in international trade. Also, understand how they affect customs calculations.") derives the customs duty amount.
    -   The total purchased value of one or more articles determines the amount.
    -   When deriving the amount, for some jurisdictions, **NetWeight and Volume are necessary**.

## Import tax (VAT/GST)

-   VAT/GST is a consumption tax imposed on customers.​
-   VAT/GST is typically a percentage of the selling price and customs duty.
-   VAT/GST is imposed on **both imports and intracountry sales of goods​.**
-   The Avalara tax code derives the VAT/GST amount from [Harmonized System codes](/avatax-for-cdit/oko4112740267621/).

Notice

Customs duties and import taxes often reach 30% or more of the purchase price. It’s important for cross-border sellers to understand these costs clearly.