What an importer pays at customs
When a commercial shipment crosses Azerbaijan’s customs border, the importer pays several charges. Each is calculated separately, but they are linked: when the base of one changes, the others change too.
These payments go to the State Customs Committee, and goods are normally released once they are paid. Freight, storage and brokerage fees are not part of them — they are separate cost lines alongside the customs charges.
The main customs payments are:
- customs duty — charged on the customs value at a rate set by the HS code of the goods;
- import VAT — 18% of the customs value plus duty (and excise, for excisable goods);
- excise — only for excisable goods such as alcohol and tobacco products;
- customs fees — charges for processing the customs declaration, set by law.
Customs value: where the calculation starts
Customs value is the base for both duty and VAT. In most cases it is determined by the transaction value method: the price actually paid or payable to the supplier, in other words the invoice amount.
The invoice price, however, is not yet the customs value. As a rule, the cost of transporting the goods to Azerbaijan’s customs border, loading and handling, and insurance are added to it. In international practice this is a CIF-type basis: goods, freight and insurance up to the border.
The agreed Incoterms rule, commissions, licence fees and packing not included in the price can all affect the result. Values in foreign currency are converted into manat at the official Central Bank rate. Confirm with your broker or the customs authority which costs apply to your particular shipment.
The HS code sets the duty rate
Every product belongs to a specific code in Azerbaijan’s national customs nomenclature (XİF MN). The first six digits follow the international Harmonized System (HS); the remaining digits refine the classification at national level.
The duty rate is tied to that code. Even within one product group, the material, intended use or degree of processing can move goods into a different code — and a different rate. Duty can be ad valorem (a percentage of the customs value), specific (per kilogram, unit or litre) or a combination of both.
The code also tells you whether the goods need permits or certificates: a certificate of conformity, a phytosanitary or veterinary certificate, and so on. The HS code your supplier gives you is a good starting point, but check it against the Azerbaijani national code before you place the order.
Import VAT at 18%, excise and customs fees
Imported goods are subject to 18% VAT. The base is not the invoice price but the customs value plus customs duty and, for excisable goods, excise. In other words, VAT is charged on top of the duty, so a difference in the duty rate affects the total twice.
Companies registered for VAT can normally offset import VAT under the general rules of the Tax Code. Check with your accountant how this applies to your business.
Excise applies to alcoholic drinks, beer, tobacco products and other goods listed in the Tax Code. It is calculated separately and included in the VAT base; such goods may also face extra requirements, such as excise stamps.
Customs fees are paid for processing the declaration. Their amount is set by law, and the broker calculates them for each declaration.
Certificate of origin and duty exemption
The country of origin can affect the duty. Goods produced in CIS countries with which Azerbaijan has free trade agreements may be exempt from import duty when a valid certificate of origin (form ST-1) is presented.
What matters is where the goods were made, not where they were shipped from. Goods dispatched from a warehouse in a CIS country but manufactured elsewhere do not automatically qualify.
The exemption does not cover VAT: VAT is still charged, there is simply no duty in its base. Before the cargo leaves, confirm with your broker that the certificate is correctly issued and that the exemption applies to your specific goods.
Worked example: letters instead of numbers
Rates depend on the code, so the example uses letters — the same sequence works for any shipment. If a specific duty applies, D is calculated from quantity (kilograms, units and so on) rather than from value.
The formula shows why estimating customs costs from the invoice alone is a mistake: as T, S and d change, both duty and VAT change. For goods exempt from duty under a certificate of origin, D = 0 and VAT is calculated on V + A.
- P — the price of the goods on the invoice;
- T and S — freight and insurance up to the customs border;
- V = P + T + S — customs value;
- d — duty rate for the HS code; duty D = V × d;
- A — excise (A = 0 if the goods are not excisable);
- VAT = (V + D + A) × 18%;
- F — customs fees;
- total customs payments = D + A + VAT + F.
What happens with a wrong HS code or undervaluation
The riskiest way to cut customs costs is to under-declare the value on the invoice or to “fit” the goods into a code with a lower rate. Customs compares the declared value with the value of similar goods and, if in doubt, can request additional documents and adjust the value itself.
The opposite also happens: declaring a higher-rate code without proper research means overpaying. Either way the answer is the same — support the code and the value with documents. Typical consequences of getting it wrong:
- delayed release and extra storage time;
- recalculation of duty and VAT with additional payment;
- penalties and stricter checks on future shipments;
- goods held because the corrected code requires a certificate you do not have.
How customs costs work with TuranKargo
TuranKargo offers two service types. With “Transport” we deliver the cargo to Azerbaijan, while you or your broker handle customs clearance and pay duty, VAT and fees directly.
For cargo from China, Türkiye and the USA there is also “Transport + Customs” (“Cargo”): we handle customs clearance as well, and you see one final amount. When the goods are received from the supplier, they are measured, documents are checked and the final price is confirmed.
For cargo from other countries, customs clearance is available as a separate brokerage service on individual terms: document checks, preparing the customs declaration and coordinating the procedures. Include a product description, the invoice and, if available, the HS code in your request — the offer will be more accurate.