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Policy & Compliance


SAD Box 33 and using commodity codes in CDS


In the previous article we looked at the payment mechanism of the Customs Declaration Service (CDS) and its similarities and differences in comparison to the current CHIEF system. In this article, we will start analysing the individual elements of the mechanism responsible for the calculation of duties and taxes in CDS and how this may differ from what is used today


CHIEF users are certainly familiar with SAD Box 33 which identifies the commodity that is being imported or exported. Box 33 data – in combination with additional Taric or national codes where needed, tax lines, tax codes or override codes – allows CHIEF to be generally ready to calculate imports dues. But CDS will in most cases utilise a different mechanism that will rely heavily on coding the procedure or the tariff heading and not the tax lines. Even within CHIEF, SAD Box 33, Commodity


Code, is in reality not a single piece of information and as such will be replaced by more than 1 data element (DE): 6/14 Commodity code — Combined nomenclature code


6/15 Commodity code — Taric code 6/16 Commodity code — Taric additional code(s)


6/17 Commodity code — National additional code(s)


The CN (DE 6/14) and Taric codes (DE 6/15)


identify the commodity; together with the country of origin and potentially other measures, they should on their own be sufficient for the system to calculate Erga Omnes duty and standard VAT without a need for tax lines, as is the case in CHIEF. However, any additional measures applicable


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TABLE 1 Product


Bicycles with ball bearings from China


TABLE 2 Product


Men's or boys' shirts, knitted or crocheted from China


DE 6/14 combined nomenclature


87120030


DE 6/15 Taric code 90


DE 6/16 Taric additional code


B999


(Anti-dumping duty) DE 6/17 national additional code


Blank


DE 6/14 combined nomenclature


61052090


DE 6/15 Taric code 90


DE 6/16 Taric additional code


Blank


D.E. 6/17 National Additional Code


VATZ (Children’s)


to the commodity and not stemming from the customs procedure will be encoded in DE 6/16 and 6/17.


Taric additional codes Under DE 6/16, it will be possible to enter up to 99 Taric additional codes at item level. Taric additional codes are four-digit alphanumeric codes used to apply specific EU measures that are not coded elsewhere. These codes are already used in CHIEF but are supplemented by the addition of corresponding tax codes. Most common examples of such measures are Anti- Dumping Duty, Countervailing Duty or Variable Charges for goods containing specific ingredient content, such as milk – the information and guidance on their usage is available in the tariff (See table 1). Similarly, under DE 6/17 it will be possible to


enter up to 99 national additional codes. The national additional codes will be used, in conjunction with information provided elsewhere in the declaration, to calculate the duties and taxes applicable. The codes declared in DE 6/17 will also be used to indicate any exemptions or reduced rates of taxes that may be applicable for


national taxes and other charges. Examples of such codes include:


VATE VAT Exempt duty rate VATR 5% VAT duty rate VATZ 0% VAT duty rate For example, see table 2. These additional codes will constitute an


integral part of CDS and will allow the system to calculate the correct amounts of duty. Other import taxes and tax lines should not be required in most cases. The above examples show relatively


uncomplicated scenarios with one additional code per line, but users should be aware that CDS will allow for a number of various combinations of codes to be entered. What is also important to remember is that the above description is based on the current EU trade tariff. Post-EU exit, the new tariff and UK-only measures will apply, although these cannot be confirmed today. So, is the new mechanism completely different


from CHIEF? The most likely answer is that it is not that dissimilar but at the same time different enough to be highlighted as one of key differences between the two systems.


July 2020


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