It’s a best practice to calculate total landed cost (shipping costs, customs fees, customs duties, and VAT) of a product at checkout for your customers. Customs duty rates are determined by a product’s HS code.
These 8–12-digit codes are part of the Harmonized Commodity Description and Coding System, an internationally standardized system of names and numbers for classifying physical goods. Every five years, the World Customs Organization (WCO) updates the codes. While the deadline for countries to update to the latest HS codes was January 1, 2022, some nations take longer to make changes.
While the first six digits of HS codes are the same for a product regardless of its destination, the last digits vary by country. You'll need to know the HS codes for each of your products in each country to correctly calculate the total import (or landed) cost of your products.
If you’re holding stock in Europe, you’ll also need HS codes to report movement of goods between EU member states. Incorrectly assigned HS codes can result in packages getting held up in customs, or even heavy fines.