> This page is for Documentation, version Integration guides (default).
> For other versions, use one of these documentation indexes:
> - Integration guides (default): https://avalara.ferndocs.com/docs/integration-guides/llms.txt
> - Refactor guides: https://avalara.ferndocs.com/docs/refactor-guides/llms.txt
> - Get certified: https://avalara.ferndocs.com/docs/get-certified/llms.txt
> - Agent to Agent (A2A): https://avalara.ferndocs.com/docs/agent-to-agent-a2a/llms.txt
> - AI use cases: https://avalara.ferndocs.com/docs/ai-use-cases/llms.txt
> - API versioning: https://avalara.ferndocs.com/docs/api-versioning/llms.txt

> For clean Markdown of any page, append .md to the page URL.
> For a complete documentation index, see https://avalara.ferndocs.com/llms.txt.
> For AI client integration (Claude Code, Cursor, etc.), connect to the MCP server at https://avalara.ferndocs.com/_mcp/server.

# Understand

Guide: AvaTax Cross-Border (Customs Duty and Import Tax)

Understand the components of customs duties and import taxes for cross-border transactions.

Customs duty and import tax represent the 2 types of charges that make up the import/export taxes and tariffs (for example, landed costs) associated with a cross-border sales transaction.

**Customs duty (tariff)**

* Customs duty is a direct tax imposed by Avalara for Government on goods from other countries​.
* Countries lower customs duties for customs unions, like the EU, or free-trade agreements, such as NAFTA.
* The government imposes a customs duty on **imports only.**
* [Harmonized System codes](https://developer.avalara.com/avatax-for-cdit/oko4112740267621/ "Learn about HS codes, their structure, and their role in international trade. Also, understand how they affect customs calculations.") derives the customs duty amount.
  * The total purchased value of one or more articles determines the amount.
  * When deriving the amount, for some jurisdictions, **NetWeight and Volume are necessary**.

## Import tax (VAT/GST)

* VAT/GST is a consumption tax imposed on customers.​
* VAT/GST is typically a percentage of the selling price and customs duty.
* VAT/GST is imposed on **both imports and intracountry sales of goods​.**
* The Avalara tax code derives the VAT/GST amount from [Harmonized System codes](https://developer.avalara.com/avatax-for-cdit/oko4112740267621/).

Notice

Customs duties and import taxes often reach 30% or more of the purchase price. It’s important for cross-border sellers to understand these costs clearly.

> **Note**
>
> Part of the **AvaTax for CDIT** integration guide. [Open the full "Understand" milestone on Avalara](https://developer.avalara.com/products/crossborder/integration-guides/avatax-for-cdit/cks9189823571932/) to see every page in this section.