Comprehensive Practical Guide to EU Reverse Calculation for Customs Clearance
Earlier this year, the Belgian Sun Customs implemented a new policy of
⌈reverse calculation method⌋ for the declaration price of Amazon e-commerce goods. After a trial period, the Belgian customs authorities held talks with local customs brokers and made supplementary adjustments to the ⌈reverse calculation method⌋. It was confirmed at the meeting that from March 1st, the customs clearance process will be strictly carried out according to the reverse calculation method to improve inspection efficiency.
The ⌈reverse calculation method⌋ specifically means that the customs system can calculate the value of the goods that must be declared based on the price of the actual sales link. After deducting some fixed costs after the imported goods arrive at the shore by a deduction method, if the customs believe that the goods have a low declared value, the reverse calculation method can also be used to appeal.
The additional rules are as follows:
Customs can accurately query the real sales link page of the goods corresponding to the SKU barcode label on the goods packaging, so it is necessary to truthfully submit the sales link when declaring imports. If the seller’s goods are out of stock and there is no sales link for the product, in this case, customs allows the seller to note a reference sales link, and customs will evaluate the price of the goods based on the selling price of the reference sales link. However, if the seller does not provide a reference sales link, if the customs compares it by themselves, it is likely to cause the seller to be in a passive state in the declaration of goods value, and it may even be determined by the customs as a low declaration. The consequences of being determined by customs as a low declaration are as follows:
• First time: Pay the tax due and be fined a minimum of 250 euros per Article (like SKU).
• Second time: Pay the tax due, and the minimum fine increases to 500 euros per Article (like SKU).
• Third time: The VAT tax number will be blacklisted by customs, and a high fine will be imposed.
Customers and friends need not be overly alarmed. The Belgian customs’ move is to rectify the industry’s low declaration chaos and guide the orderly development of the industry. As long as we strictly comply with the declaration and operate truthfully, we will not be affected by this new policy. To avoid being in a passive state, sellers can provide real relevant proofs such as the purchase contract between the two parties of the trade, payment vouchers, etc., as the judgment of the goods price.
01 Specific Content
⚫ What is the ⌈reverse calculation method⌋?
The ‘reverse calculation method’ refers to the customs automatically calculating the declared value of the product that must be declared by deducting some fixed costs of the goods during inspection. After calculation, the declared value of this calculation method usually fluctuates between 20% and 60% of the product link price. Moreover, the declared value of customs is calculated based on the value of individual items, and the deduction quantity is calculated by product.
⚫ Interpretation of the formula
The fixed costs include the following:
①. Sales VAT: Refers to the percentage of VAT in the destination country.
②. Amazon commission: Refers to the commission charged by Amazon when selling products on the Amazon platform.
③. FBA fulfillment fees: Refers to Amazon’s standard fees, which vary by country. ④. Freight costs: Refers to all freight charges incurred within Europe.
⑤. Processing costs: Refers to processing, sorting, and customs clearance fees.
⑥. End transport costs: Refers to the cost of transporting to the Amazon warehouse, the cost depends on the destination of the package.
⑦. Import tariffs: This fee depends on the product’s Taric (EU tariff table), HS code. The final declared unit price of the goods = link sales price - fixed costs The proportion of goods declaration = (link sales price - fixed costs) / link sales price
02 Review Standards
The original review standards are no longer applicable. At present, based on the reverse calculation method, two sets of trade methods have formed inconsistent declaration materials, as follows:
Materials required for general trade declaration: European local tax number + original record file
The supplementary materials are as follows:
①. Commercial invoice
②. Payment proof
③. Purchase invoice
④. Export declaration
⑤. Intra-EU freight invoice
PS: Sellers must declare the value of the goods truthfully to avoid customs inspection penalties. Those who do not meet the requirements of general trade need to adopt the reverse calculation method. In addition to the original record file, the following supplementary materials need to be provided:
Supplementary material details:
①. Proforma invoice
②. Real sales link with ASIN number
③. The Amazon store linked must match the importer’s VAT (provided together with the authorization letter)
④. Link with price (if there is no price, a link to a similar product should be provided)
⑤. Screenshot with product price
⑥. Invoices need to be provided for the following fixed costs of the reverse calculation method
Belgian customs clearance has become increasingly strict in recent years. To ensure the smooth clearance and release of goods, sellers must strictly declare the value of goods at no less than 30% of the sales price to avoid being judged as a low declaration!
To avoid the impact of the new reverse calculation rules on sellers, Niuku International strictly requires customers to comply with the declaration under the premise of ensuring compliance, and conducts a second review of the links of each shipment after the ship opens, and uses the link price to carry out a reverse calculation self-check in advance.
If it is found in the self-check that the value of the goods is significantly different from the price declared by the customer, our company will issue an early warning in advance, inform the customer that the goods may be at risk of inspection, so that the customer can handle it in time and avoid risks.
Since January 1st, our company has not had any inspections caused by reverse calculations, and the inspection rate of the European line has been less than 1% since this year. Niuku International will also continue to pay close attention to the implementation of the new reverse calculation rules in Belgium, please rest assured customers!