Paying Customs Duties and Taxes

1. What kind of taxes must be paid to the Customs Authorities be­fore the goods are handed over to legal entities and individuals?	a. Customs duties for all types of goods are printed in the Customs Tariff which is available in bookshops.
2. How can I know the rates of customs duties?	b. This is a kind of tax to which only certain types of goods are subject.
3. What is ad valorem duty and how is it calculated?	c. Well, the taxes that must be paid on importation include as a rule customs duties, value-added tax and some special import taxes.
4. I see. And are all imported goods liable to VAT?	d. Most of them, there is only a small number of exemptions. The tax rate is a fixed percentage of the customs value plus any customs duties and taxes collected by the Customs on importation.
5. What does a special tax mean?	e. Tax rates are decided by the Government Authorities, each year in connection with the passing of the Budget. So tax rates can be changed from year to year.
6. How are tax rates settled?	f. Ad valorem duty is a tax charged as a percentage of the value of the goods, as distinguished from a fixed duty or tax. Calculation of ad valorem duty is based on the CIF value of goods, that is on cost, insurance and freight charges. Note, that freight charges should always be included in the customs value.

Task 9. Make up sentences of your own to illustrate the meaning of the following terms: ad valorem duties; value-added tax; special import taxes; freight charges; the Customs Tariff

Task 10. Choose corresponding Russian terms for English Customs terms. Make up your own sentences with these terms.

1. a single duty rate	a. таможенный режим
2. duty reductions	b. конвенциональная пошлина
3. most-favoured-nation treatment	c. коэффициент
4. conventional duty	d. режим наибольшего благоприятствования
5. preferential treatment	e. единая тарифная (налоговая) ставка
6. minimum rates	f. минимальные ставки
7. multiplier	g. преференциальный режим налогообложения
8. preferential rates	h. скидки таможенных пошлин
9. tariff treatment	i. преференциальные ставки

Task 11. Read and translate the following text using a dictionary if necessary:

Tariff Systems

part 1

All over the world tariff systems can be classified into four main types. The first type is represented by a single column tariff which consists of one list of duties with a single duty rate for each article, applicable equally to imports from all countries. Duty reductions ar­ranged by countries exercising such a system are usually universal for all the other countries. Germany, Japan, the Scandinavian countries are amidst those practicing the single column tariff.

The second type used in customs practice is a maximum-minimum tariff. This involves the setting-up of two columns of duties in the tariff. The lower rate is applicable to countries enjoying most-favored-nation treatment whereas the higher to other countries. Sometimes maximum-minimum tariffs include only one column (usually called the mini­mum tariff) and the rates of the maximum tariff are calculated by applying a percentage increase or multiplier to the minimum rates. France and Spain are among the countries using such a system.

Task 12. Read the following text and ask questions covering its main information.

Tariff Systems

part 2

The countries where a general-conventional tariff is used start with a single column of duties and proceed to establish a second column of conventional duties in negotiations with other countries. This second column contains only the items on which conventional rates have been settled and does not, therefore, cover all tariff items, to which the general tariff is applied. The conventional rates are correspondingly common mostly with the countries of the most-favoured-nation treat­ment.

And the fourth type of customs tariff is a preferential tariff. This one represents an import duty at a specially low rate on goods from a country that is being favoured. Usually preferential tariff is applied to the countries of the same group. Thus, within the European Eco­nomic Community preferential rates are exchanged exclusively be­tween the countries developing the respective spheres and are not extended to outside countries.

Task 13. Determine if the statement is false, true or absent in the text.

1. Tariff systems can be classified into four main types.

2. A maximum-minimum tariff consists of one list of duties with a single duty rate for each article, applicable equally to imports from all countries.

3. Russia practices the general-conventional tariff.

4. The maximum-minimum tariff involves the setting-up of two columns of duties in the tariff.

5. A general-conventional tariff uses a second column of conventional duties only on the items on which rates have been settled and does not cover all tariff items.

6. The general tariff represents an import duty at a specially low rate on goods from a country that is being favoured.

Task 14. Find out (use the internet if it is necessary) and tell the group:

1. What countries use general-conventional tariffs?

2. What countries use preferential tariffs?

3. What type of tariff system does Russia use?

Step 3

Talking points

Task 15. Working in pairs make up a dialogue using information from Task 8. Add as much connecting phrases as possible.

Task 16. Work in pairs. Discuss the following points:

1. A single column tariff is the easiest that is why it is the most effective one.

2. Differences in tariff are caused by political background.

Task 17. Choose any role and be ready to act out as a Customs officer and a businessman. Discuss the following situation: a businessman is going to export or import some goods (use any goods and foreign country you like) and needs an advice on necessary procedures.

Task 18. Competition work. Divide into 3-4 teams. Find out the differences and similarities of four main types of tariff systems. Choose the best one.