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The importance of the TARIC Code

As you may be aware, trade is regulated by different systems. In Europe, the TARIC code is used to classify each good according to the different international conventions.

It is a highly important measure and was created in 1988 to unify the criteria for the administration of customs tariffs and the different trade rules of each country in the European Union.

In this article I will show you what the TARIC code is, how it is used and, moreover, how to recognize its structure in a given product.

What is the TARIC code?

The TARIC code is the regulation used by the European Union to classify different international shipments.

Its purpose is to simplify all the procedures for determining taxes, duties and other limitations.

It is, according to the Spanish Tax Agency, a regulation that covers the Common Customs Tariff and meets the requirements of foreign trade and the European Union’s policies on the import and export of goods.

The TARIC code is very important in international trade since, by including it in the proforma invoice and accompanying the SAD (Single Administrative Document), it ensures a smoother flow of customs formalities and avoids unexpected charges.

How the TARIC code is used

The TARIC code is to be used through the nomenclature annexed to the International Convention on the Harmonized Commodity Description and Coding System (HS) or the Common Customs Tariff (CCT) of the European Union.

Why is it important to make the right tariff classification?

As specified by the Spanish Tax Agency, a proper tariff classification makes it possible to:

How are goods classified through the TARIC code?

The classification of a tariff heading, i.e. goods, is carried out according to a number of criteria.

These criteria may seem simple at first glance, but it is highly recommended that the work be carried out by a freight forwarder or customs broker to avoid any problems.

Natural Products

These are classified according to whether they are of animal, vegetable or mineral origin and also according to their degree of processing (freezing, drying, etc.).

Other products

These are classified according to whether they are considered commercially relevant or not.

If the product is commercially relevant, it is classified according to its composition (plastic, iron, cotton, etc.) and its degree of processing.

If it is not commercially relevant, it is classified according to its function, use or destination.

Presentation

This may be disassembled, vacuum-packed, with accessories, in bulk, etc.

How can you find out the TARIC code of a product?

There are four ways to find out the TARIC code of a product:

Here is a step-by-step guide:

Tariff headings by code

If you have the code for the tariff heading, you can enter it in the box.

If you decide to search by product, you can complete the “Country of Origin” and “Country of Destination” information with any option and browse the complete list of goods.

As you click on the different options, you will drill down through the information until you find the correct tariff heading.

Tariff heading by description

From the description of a product and clicking on the result, you can see the full description according to the chapter and subheadings that comprise it.

This way you can confirm that the description corresponds to your product.

Structure of the TARIC code

Let’s start at the beginning.

How many digits are there in a TARIC code?

Generally speaking, and with the exceptions of Germany, Japan and the United States, which add four additional digits, the TARIC code is made up of 10 digits

The first six digits correspond to the “Harmonized System” (HS Code).

This system is divided into:

1. Chapters: these are the first two digits that classify the merchandise as raw and natural products.

2. Headings: the third and fourth digits give rise to further subdivisions of goods.

3. HS Subheadings: two more digits that complete the information of the heading.

4. CN Subheadings: the seventh and eighth digits belong to the “Combined Nomenclature” and are used to correctly apply the Common Customs Tariff. That is, the tariff that European Union countries apply to third parties.

The complete eight-digit structure allows member countries to obtain information and statistics on goods traffic.

The next two digits correspond to the “TARIC Tariff Code”, the purpose of which is to achieve a greater degree of specificity as to the nature of each of the products to which it refers.

There may be special cases in which a product does not have a subdivision and, in that case, the TARIC value will be 00.

TARIC code example

Here is an example of a TARIC code and what each of its sections corresponds to.

TARIC Code: 8452 90 90 00

Code 8452: This is the main section of the TARIC code and in this case refers to “Sewing machines and similar machines for the textile industry”.

Code 90: This subsection refers to “Other sewing machines and similar machines”.

Code 90: In this case, it corresponds to additional information and refers to “Other sewing machines and similar machines, including machines for darning and crochet stitching”.

Code 00: This last part refers to the product having “No accessories”.

Updates and changes to the TARIC code

The TARIC code was established in 1988 as a solution, by the countries belonging to the World Trade Organization, to the need to establish a more uniform tariff classification system.

Currently, the code is kept up to date thanks to the work of the European Commission and with an almost automatic transmission of information between its member countries.

The work is conducted on the basis of a common framework formed by European Union regulations and an additional framework that responds to the legal needs of each country.

In Spain, the body in charge of carrying out all this work is the Customs and Excise Duties Department.

Changes to the TARIC code can be proposed by member states of the European Union or by trading companies wishing to modify the classification or tariff of a particular good. These proposals must be reviewed by the European Commission and, if approved, will be incorporated into the TARIC code.

Over time, the code has undergone several changes in order to adapt to the different environments and scenarios that arise in international trade.

One of the most significant has been the implementation of the online database that has allowed users to search for the code of each product in a much simpler way.

In addition to this, over the years the number of categories has been expanded and subsections have also been included to better organize each of the product categories.

Conclusion

As I have explained throughout the article, the TARIC code is a way of unifying criteria for the classification of customs tariffs when importing and exporting goods.

The European Commission plays a key role in this aspect, working together with member countries to keep the code updated according to the different scenarios that continuously emerge.

Each part of the code represents a different aspect of the product and that is one of the reasons why it has remained current since its creation in 1988.

Trade is an area in constant evolution and that is why the creation of the online database has been fundamental in order to have all the detailed information at the reach of any user.

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