What is customs?
Customs duty is a fee or tax imposed on goods when they are transported across national borders.
Many Swedish companies find customs to be complicated and time-consuming. This is completely understandable, customs regulations can be complicated. But with the right knowledge, it becomes much easier than you think.
In Sweden, customs are handled by the Swedish Customs Administration, which controls and taxes goods imported into or exported from Sweden. Simply put, customs acts as an “entry fee” for goods entering the country.
When you buy something from a country outside the EU, such as the US or China, you may have to pay customs duty on top of the price you already paid. This serves several purposes:
- It generates revenue for the state
- Protects Swedish companies from unfair competition
- and helps control trade flows.
Tariffs have existed for a long time. In Sweden, they were introduced as early as the 12th century, initially to fill the treasury. Later, tariffs began to be used to protect Swedish industry. In recent decades, tariff levels have been lowered through negotiations within the EU and the World Trade Organization (WTO). But the rules have also become more complex.
Why are there customs duties – The basics
For Swedish companies that want to export or import, it is crucial to understand why tariffs exist. Countries use tariffs primarily to protect their domestic market. When foreign goods become more expensive through tariffs, domestic companies have a better chance of competing.
Customs duties also contribute to the state budget and provide revenue that is used for public services. At the same time, customs duties serve as a tool for trade policy, with countries negotiating tariff rates to obtain better terms in trade agreements.
We have seen this clearly with American President Donald Trump's trade tariffs against China and the EU, which created a carousel of countermeasures and affected all of global trade.
From a security perspective, the Swedish Customs Service plays a crucial role. They check that dangerous goods do not enter the country, ensure that imported products meet Swedish safety standards, and stop prohibited goods such as drugs and weapons. This is something that affects all Swedish companies, regardless of whether they trade internationally or not.
The EU Customs Union – How it affects you
The EU operates as a customs union, which means that member states have common rules for goods from outside the union. The most important thing for you to know is that within the EU there are no tariffs between countries, you can trade freely with Germany, France or any other EU country without any extra fees.
However, if you buy from the US, China or other countries outside the EU, customs duties may apply. In practice, customs authorities in all 27 EU countries work as a single unit. This means that once your goods have entered the EU in one place, they can move freely throughout the Union.
The EU also has special tariff agreements with certain countries such as Iceland, Switzerland and Turkey. These so-called tariff preferences can mean lower or no tariffs for certain goods. The EU is constantly negotiating new free trade agreements that may affect your trading opportunities.
The difference between customs duty and VAT
Many people confuse customs duty and VAT, but they are two completely different charges. We will make sure to explain the difference simply:
VAT is paid on all goods and services in Sweden, regardless of where they come from. The VAT rate is generally 25 percent and the Swedish Tax Agency is responsible for this. Customs duties, on the other hand, are only paid when you import from countries outside the EU, so-called third countries.
When you import, the total cost is: price of the item + shipping + duty + VAT. VAT is calculated on the entire amount including duty, which means that the total cost can be significantly higher than you initially thought.
If you have a VAT registered company, you pay VAT to the Swedish Tax Agency, while private individuals and companies without VAT registration pay directly to the Swedish Customs Agency upon import. This is important to keep in mind to avoid surprises.
Different types of customs duties – How it works
There are several ways to calculate customs duties, and it may seem complicated at first. But we'll explain it simply:
The most common form is ad valorem duty, where you pay a percentage of the value of the goods. If a good costs 1000 kronor and the duty rate is 10 percent, the duty fee will be 100 kronor. Simple and straightforward.
Specific duty is a fixed fee per unit, regardless of value. It can be 50 kronor per kilo or 20 kronor per piece. This is often used for bulk goods or when weight is more important than value.
Composite duty combines both, you pay both a percentage of the value and a fixed fee per unit. Seasonal duty is used mainly for agricultural products and varies depending on the season.
Customs duties and classification of goods
Every imported product must be assigned a specific Harmonised System (HS) code. This code determines the applicable tariff rate and any restrictions. There are over 10,000 different product codes, so it's easy to make mistakes.
To find the right code, you need to analyze the product carefully, material, function and composition all matter. Then you use the Common Tariff, the EU's database with all codes and duty rates. But be careful, the wrong classification can be expensive.
As an importer, you are always responsible for ensuring that the classification is correct, even if you hire help. Mistakes can lead to additional duties, interest or administrative fees. Many companies therefore choose to turn to experts to avoid costly mistakes.
How the customs value is calculated – More than just the purchase price
Customs value is the basis for the customs duty and is based on the transaction value, the price you actually pay. But it is not just the purchase price that counts. To this are added shipping costs to the first destination in the EU, insurance during transport and certain licenses or royalties.
This means that the total cost of getting the item to Sweden affects the customs duty. An item that costs 1000 SEK plus 200 SEK in shipping has a customs value of 1200 SEK, and the customs duty is calculated on that entire amount.
When the transaction value cannot be used, such as in the case of gifts or trade between related companies, alternative methods are available. However, these are more complex and often require expert assistance to be done correctly.
Import and export for Swedish companies
For Swedish companies, international trade is more than just buying and selling goods across borders. Every transaction with countries outside the EU requires careful handling of customs processes, whether you are importing raw materials for production or exporting finished products to new markets. Many companies underestimate the complexity and learn expensive lessons when declarations are denied or shipments are stuck at customs. With the right knowledge and preparation, you can avoid these pitfalls and make your international trade smooth and profitable.
Import to Sweden – Step by step
The import process follows clear steps, but each step must be done correctly to avoid delays. First, the goods are declared to Customs, then a detailed import declaration is submittedThere are at least 31 items that must be filled in correctly – if you fill them in incorrectly, the declaration will be rejected.
Customs may choose to physically inspect the goods or review documents. After customs, VAT and other fees have been paid, the goods may be released. The entire process can take anywhere from a few hours to several days, depending on the type of goods and whether inspections are required.
For companies that import regularly, there is a simplified procedure. This means less information to be entered when importing and completing it afterwards. Large companies can apply for AEO certification (Authorised Economic Operator), which means fewer checks and faster processing.
Export from Sweden – What you need to know
When exporting to countries outside the EU an export declaration is normally required. Just like with imports, there are many items that must be filled in correctly. Security checks are carried out to identify risks, and statistical data is collected.
Exports from the EU are generally VAT-free, which benefits Swedish export companies. You can get VAT back on input goods used for export, making your products more competitive.
For smaller shipments, simplified customs declarations such as CN22 for letters or CN23 for parcels are used. These must be completed in English with correct information about contents, value and origin. Many companies have their shipments returned due to incorrectly completed forms.
Controls and compliance
It can be easy to believe that customs processing is complete once the declaration is submitted and the fees are paid. But the reality is that the Swedish Customs conducts extensive checks both at the border and several years afterwards. For companies that are not aware of the rules, this can be very costly. By understanding what is checked and what penalties await you in case of errors, you can build routines that protect your company from unpleasant surprises.
Customs controls – What is checked and why
Customs carries out various checks to ensure compliance with regulations. Document checks involve reviewing declarations and invoices. Physical checks may include inspection, sampling or X-raying of goods.
Post-clearance checks are particularly important to understand, as Customs can review your transactions several years in the future. They check whether the descriptions of goods are correct, whether the values are correct, whether the origin is correct and whether the quantities are stated correctly.
The best way to avoid problems is to do it right the first time. Invest in proper management and seek help when in doubt. The costs of fixing mistakes later are always much higher than doing it right the first time.
Penalties for errors – Making mistakes is expensive
Penalties for violations can be significant. Administrative penalties include additional duties for misclassification, interest on late payments, and fees for incorrect declarations. These come quickly and without warning.
More serious errors can lead to smuggling charges with fines and, in the worst case, imprisonment. Even negligence in declarations can have criminal consequences. Many companies underestimate the risks and learn expensive lessons.
Preventive measures are always the smartest, stay up to date on regulations, check declarations carefully and use professional help when in doubt. It saves both time, money and headaches.
Modern customs management
The customs world is changing rapidly through digitalization and political decisions that affect the entire global trade. For Swedish companies, this means both opportunities for more efficient processes and new challenges to manage. Brexit clearly showed how quickly conditions can change, while new technologies such as AI and blockchain are revolutionizing the way customs authorities work. Companies that keep up with developments gain competitive advantages, while those that lag behind risk getting stuck in old, inefficient routines.
Digital tools and modern customs systems
Customs processing has been greatly digitized. The TARIC system is the EU's central database of all customs rates and rules. It is continuously updated and provides access to current information for all EU countries.
Modern systems use AI for risk analysis and blockchain for secure document management. For companies, this means both opportunities and demands for updated systems and the right skills.
E-services make it easier to manage declarations and get quick information, but you need to understand how the systems work to use them effectively. Many companies save both time and money by using the right digital tools.
Brexit and other changes – What affects you
Brexit has created major changes with the reintroduction of tariffs between the EU and the UK. Many Swedish companies that traded with the UK suddenly faced new costs and more complicated processes. This shows how quickly conditions can change.
Environmental and sustainability issues also affect customs management. The EU is planning carbon tariffs based on environmental impact, and new rules for sustainable production are continuously being developed.
For businesses, this means staying up to date and being prepared to adapt. Those who act quickly when regulations change often gain a competitive advantage.
Practical advice for Swedish companies
If you are a beginner or run a smaller business, it is best to start simple. Learn the basics first, use the Swedish Customs' e-services and build a network with other companies who have experience. Invest in basic training, it will save you money later. Many of our customers at Tullify have discovered that professional help from the start actually saves both time and costs compared to learning everything yourself.
For established companies that already import or export, you should focus on optimizing processes. Automate recurring tasks, apply for benefits such as AEO certification, and stay continuously updated. Build strong relationships with both authorities and partners. With over 20 years of experience, we often see that companies can halve their customs processing times through the right processes and expert assistance.
Large companies with extensive trade need strategic planning where customs are integrated into the business strategy. Systematic compliance programs, advanced IT solutions and global harmonization of processes are crucial for success. We help several multinational companies create uniform procedures that work across Europe.
Where to get help – Professional support
When you need help, there are several sources. Tullverket.se has extensive information and e-services. The European Commission website provides information on EU rules, while the WTO covers international rules.
For professional help, you can contact authorized customs agents who specialize in customs handling. At Tullify, we focus solely on exports and have helped thousands of Swedish companies avoid costly mistakes. With short response times and industry-leading expertise, you get help quickly when you need it. Many companies choose this path to avoid hassle and focus on their core business instead.
Training is available through Swedish Customs courses, industry organizations and university programs. But also invest in the right partner, it is always profitable in the long run to have an expert by your side.
Success Factors – What Really Matters
For Swedish companies that want to succeed in international trade, a few things are extra important. Understand that customs is complex but manageable with the right knowledge and tools. Invest in correct handling from the start, mistakes will be very expensive to correct later.
Stay up to date on technology and regulatory changes. Digitalization creates new opportunities but also requires adaptation. Sustainability issues are becoming increasingly important and are influencing future trade policy.
The most important thing is to build the right skills and processes. Compliance is not just a requirement, it can also provide competitive advantages through faster and more cost-effective trading.
Swedish customs management continues to evolve in line with EU policy and international trends. With the right knowledge, tools and partners, you can navigate this important part of global trade successfully.
We help Swedish companies do it smoothly and cost-effectively.
