Custom duties

: (Photo: EU Commission)

Custom duties

A levy to be paid when a product is imported. Part of the EU's own income. The EU is a customs union with no internal tariffs but with a common external tariff against other countries.

For example, a bicycle from Japan is taxed with a tariff of 15% when it is imported into the EU. Therefore, a bicycle that costs 200 Euro will entail a 30 Euro contribution to the EU. Member states receive 10% of the custom duties to cover collection costs at their sections of the common EU borders.

Developing countries have special agreements with the EU to permit the import of goods on the basis of quotas rather than custom duties, or at special rates of reduced duty.

The complicated system is susceptible to fraud.

Custom duties are decided by qualified majority vote in the Council after a proposal from the Commission. The European Parliament has no say. See the rules in the Lisbon Treaty Art. 31 TFEU.

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