Combined nomenclature

What it means

The combined nomenclature is the eight-digit goods classification used across the European Union. It builds on the six-digit Harmonised System of the World Customs Organization, and the European Commission updates it every year with effect from 1 January.

The code is not a description of the goods but a decision on the rate: duty is calculated from the customs value at the percentage the tariff attaches to that code. Together with the origin of the goods it also decides whether a preferential rate or an import ban applies.

The Combined Nomenclature is extended by the ten-digit TARIC code, which adds two more digits to the eight for EU measures such as anti-dumping duties, quotas or tariff preferences. An import customs declaration therefore carries the TARIC code, while Intrastat needs only the eight digits.

How it works in practice

The code goes on the customs declaration for imports and exports and into the Intrastat return for trade inside the union. The annex to the VAT Act refers to it as well, so the classification decides whether goods carry the reduced VAT rate.

Where the classification is uncertain, the Financial Administration can be asked for binding tariff information on the goods. The decision holds for several years, binds customs authorities in every member state, and is the only way to secure a classification in advance.

When a client starts importing, we go through the product range with them and record the code for each group of goods on the stock cards. The code then flows automatically into invoices and into the papers for the customs representative, so the same goods need not be classified again for every shipment.

What to watch out for

A code copied from the invoice of a foreign supplier is no defence. The declarant answers for it, and when customs reclassifies the goods in a post-clearance check, additional duty and import VAT are assessed backwards over several years of imports at once, with interest.

The nomenclature changes every year, so a code valid last year may disappear or split from January. A declaration with an invalid code is rejected, the shipment waits and the customs procedure drags on; the code list in the stock system is therefore updated before the first January shipment.