# Harmonized System codes

Source: https://developer.avalara.com/products/crossborder/integration-guides/avatax-for-cdit/oko4112740267621/

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

# Harmonized System codes

Learn about HS codes, their structure, and their role in international trade. Also, understand how they affect customs calculations.

[Harmonized System codes](https://www.trade.gov/harmonized-system-hs-codes)Customs authorities use these codes, also referred to as HS codes, to calculate tariff rates for all internationally traded products. [World Customs Organization](http://www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-system.aspx#:~:text=New%20training%20opportunity%20for%20the%20private%20sector&text=The%20Harmonized%20Commodity%20Description%20and,World%20Customs%20Organization%20\(WCO\).) develops and maintains them. HS codes provide a standardized and consistent method for charging customs duties, so all parties understand the charges that customs officials render.

Products receive HS code identification numbers based on certain characteristics, including materials and function. You need HS codes to trigger customs calculations. When creating cross-border transactions, it’s important for items to have the correct HS codes assigned to them to help ensure that customs duty charges are more accurate.

The 1st 6 digits of the codes are uniform across all major global trading markets, and each market (country) has its own unique set of numbers that follow.

There are 3 components to the 1st six-digit set of numbers. (The final digits are the unique digits for a country.)

-   Chapter: The 1st and 2nd digits categorize the product (for example, Women's apparel, dress or skirt).
-   Heading: The 3rd and 4th digits define the classification further (for example, knitted or rocketed).
-   Subheading: The 5th and 6th digits specify the product in greater detail (for example, wool or cotton).

Note

HS codes and tariff codes differ in that HS codes don’t include any country-specific identifiers or suffix. Tariff codes include the country-specific suffix and, thus, will be longer than 6 digits.