Sign up for an absolute no-cost account and experience the future of logistics today.
Create Your Free Account!
Log in Sign up
Back

How to Pay Customs Duties: A Complete Guide

13-11-2025
customs duties

Your international shipment has arrived in the country, but it’s stuck. You receive a notification demanding payment for “customs duties,” and suddenly your supply chain is on hold. This scenario is a common and costly frustration for businesses of all sizes. 

Understanding how to pay customs duties is more than a formality; it’s a critical part of managing your budget and ensuring your goods are delivered on time. This process, from calculation to final payment, can seem complex, but it doesn’t have to be. 

This guide will demystify the entire process. We will explain why duties exist, show you how to calculate them, and walk you through the exact payment procedures in key markets like Germany and the USA.  

Why Do Customs Duties Exist? 

Before we get into the “how,” let’s briefly cover the “why.” Custom duties are a type of tax or tariff imposed by a national government on goods as they cross international borders. Their existence serves two primary purposes: 

  1. Revenue Generation: For many governments, duties on imported goods are a significant source of national income. 
  1. Trade Regulation & Protection: By raising the price of imported goods, duties can protect local industries from foreign competition and prevent unfair trade practices like “dumping” (selling goods abroad at an artificially low price). 

The responsibility for paying these duties is determined by the Incoterms® used in the sales contract. For a complete breakdown of these rules, read our Guide to Incoterms 2020. 

Step 1: How to Calculate Your Customs Duties 

You cannot pay your duties until you know the exact amount owed. Calculating your custom duties accurately is the most important step in budgeting for your shipment’s total “landed cost”—the full price of getting your product from the factory to your door. 

The calculation is based on several key factors: 

  1. The Harmonized System (HS) Code: This internationally standardized 6- to 10-digit code classifies your product. Getting this code right is essential, as it determines the specific duty rate. 
  1. The Customs Value: This is the total value of the shipment used to calculate the duty. It is almost always the CIF value (the Cost of the goods + Insurance cost + Freight cost). 
  1. The Country of Origin: Where the goods were manufactured, which can influence if preferential tariff rates apply under a free trade agreement. 

Helpful Calculators and Resources 

While a professional customs broker (like the expert team at Mydello) can handle this for you, you can get a good estimate using online tools. A good custom duty calculator can be invaluable for planning. 

  • Official Government Resources: Many countries offer their own tools. The Estonian Tax and Customs Board, for example, provides resources for calculating import duties into the EU. 
  • Commercial Calculators: Third-party providers offer sophisticated tools that can estimate landed cost, but often require a subscription. 

Example Calculation (Simplified EU – Germany) 

Let’s say you are importing electronics from the USA to Germany. 

  • Cost of Goods: €5,000 
  • Insurance & Freight: €800 
  • Customs Value (CIF): €5,000 + €800 = €5,800 
  • Hypothetical Duty Rate (from HS Code): 3% 
  • German VAT Rate: 19% 

Calculation: 

  1. Customs Duty: €5,800 x 3% = €174 
  1. VAT Calculation Base: (Customs Value + Duty) = €5,800 + €174 = €5,974 
  1. VAT Amount: €5,974 x 19% = €1,135.06 
  1. Total Taxes & Duties Due: €174 + €1,135.06 = €1,309.06 

Step 2: How to Pay Customs Duties – The Process 

Once the duty amount is calculated, the next step is the actual payment. This process is usually managed by the entity handling your customs clearance: either your shipping carrier (like DHL/UPS) or your customs broker/freight forwarder. Payment is almost always required before the goods are released for final delivery. 

Payment Process in Germany (EU) 

When importing commercial goods into Germany from a non-EU country, the process typically looks like this: 

How it Works: 

  1. Entry Filing: Your customs broker or carrier files an electronic customs declaration with the German Customs Administration (Zoll). 
  1. Duty Assessment: The customs system assesses the declaration and issues an official notice of the duties and Import VAT (Einfuhrumsatzsteuer – EUSt) owed. 
  1. Notification: The broker or carrier receives this assessment and notifies you, the importer, of the total amount due. 

Common Payment Methods: 

  • Payment via Broker/Forwarder (Most Common): Your logistics partner (like Mydello) pays the duties to the customs authority on your behalf, often through their own deferment account. They then send you a single, consolidated invoice for the duties and their services. This is the most seamless method. 
  • Payment to Carrier: If a courier is handling the shipment, they will send you an invoice with a breakdown of the duty, VAT, and their administrative fee. This can typically be paid online via a secure link with a credit card or bank transfer. 

Payment Process in the USA 

For commercial shipments entering the United States, the process is managed by U.S. Customs and Border Protection (CBP). 

How it Works: 

  1. Entry Filing: A customs broker must file a formal customs entry for your goods with CBP. 
  1. Duty Assessment & Release: CBP reviews the entry. If everything is in order, they will release the goods and issue a bill for the duties owed. 
  1. Payment Deadline: The duties are typically due within 10 business days of the goods being released. 

Common Payment Methods: 

  • Payment via Customs Broker (Standard for Businesses): This is the most common and efficient method. The broker facilitates the entire process, pays the duties to CBP on your behalf, and then invoices you. This ensures compliance and timeliness. 
  • Automated Clearinghouse (ACH): For established importers, this is a popular electronic payment method. You can authorize CBP to directly debit your bank account (ACH Debit) or you can initiate the payment to CBP yourself (ACH Credit). 
  • Payment at Port of Entry: While possible, it is less common for businesses to pay directly at the port with a check or cash.


Conclusion: Key Takeaways for a Smooth Payment Process 

Understanding how to pay customs duties is essential for any successful importer. By planning for these costs and using accurate documentation, you can turn a potentially complex process into a simple, seamless part of your supply chain. 

  • Calculate First: You must accurately calculate the duties owed based on your product’s HS code and CIF value before you can pay them. 
  • Payment is Facilitated: You will rarely pay customs directly. Payment is almost always handled by your customs broker, freight forwarder, or courier. 
  • Pay Before Delivery: Be prepared to pay all duties and taxes before your goods will be released for final delivery. Delays in payment will cause delays in receiving your cargo. 
  • Expertise Prevents Problems: The smoothest way to handle customs duties is to partner with an expert. A reliable logistics provider with in-house brokerage, like Mydello, eliminates the hassle and ensures your shipments clear customs without a hitch.
     

The information contained in this blog article is accurate as of the publishing date and is liable to change. Contact MyDello’s expert team to get the most up to date information about customs duties.