Customs Duty on the Freight Invoice: Check the Incoterm

From 1 October 2026, a dated EU change touches the customs duty on the freight invoice: covered steel products entering the EU must be accompanied by evidence of the country where they were melted and poured. It does not change what a duty line is; it is a reason to check who is paying it.

On the EU side, Commission Implementing Regulation (EU) 2026/1963 of 28 August 2026 applies from 1 October 2026. Importers of steel products covered by Regulation (EU) 2026/1384 must prove the country of melt and pour, normally with a mill test certificate showing that country and the heat number. Where no mill test certificate is available, specified alternative documents carrying both data points can serve as standalone evidence until 30 September 2027. Article 2(3) states that failure to declare the country with appropriate verifiable evidence leads to rejection of the import. The Commission's consultation notice of 4 June 2026 describes the regime behind it: 18.3 million tonnes of free-of-duty quota and a 50 per cent duty above it.

A customs duty line on a freight or customs invoice generally represents import duty assessed by the customs authority and charged to the party responsible for the customs transaction. The authority calculates it under the applicable tariff rules, which can depend on the customs value, the tariff classification and the origin. Where a forwarder or broker advances the amount on the customer's behalf, the invoice may also carry a disbursement fee, and a brokerage fee for preparing the entry; in German-speaking markets the broker's customs invoice is often called the Zollrechnung. Not every customs-related line is duty: import VAT, brokerage, disbursement and other clearance charges can appear separately, depending on the country and the provider. The fees are the provider's own charges, payable as its contract with the customer provides.

Who pays customs duty under DDP, and under the other Incoterms?

Under the ICC Incoterms 2020 rules, DDP (Delivered Duty Paid) is the only rule under which the seller clears the goods for import and pays the import duties. Under DAP, CIF, CPT and FCA, import clearance and import duties fall to the buyer; the rules differ in how far the seller carries the goods. DDP allocates import responsibility to the seller, but the seller must still be able to meet the destination country's customs requirements, including any rules on who may act as importer of record.

The ICC Academy's guidance on tariffs and Incoterms of 7 October 2025 states that under DDP the seller "pays all export and import tariffs", while under FCA, CPT, CFR and CIF "the seller is responsible for export clearance only". ICC's DAP and DDP comparison of 25 February 2025 places the difference between the two in import clearance alone.

The party that receives the duty line can depend on the customs and billing arrangements used for the shipment, including how the booking or account is configured. A seller can receive a duty line even when the order says CIF or CPT. Conversely, a DDP shipment may show no duty line on the seller's freight invoice if the customs charge was settled separately rather than billed through that invoice.

How does a tariff change reach DDP shipments?

A tariff change reaches a DDP seller directly, because under the ICC rules the DDP seller pays import duties at the rate applied when the goods are entered. A seller who quoted a DDP price before a rate change pays the new rate on entry; whether it can recover the difference depends on the price clauses in the sales contract. The Incoterm allocates the duty; it does not by itself decide whether a later rate increase can be passed on.

The EU steel regime shows the two forms this takes. A rate change, such as the 50 per cent out-of-quota duty, changes the amount on the duty line, not who bears it. A documentation change, such as the steel origin evidence, changes whether the goods are entered at all: an entry without the evidence is rejected, and a DDP seller who has not obtained the mill test certificate from its supplier owns that problem. Under DAP, CIF, CPT or FCA the same events land on the buyer.

How do you find duties billed on the wrong Incoterm?

Compare three documents for each duty line: the order that names the Incoterm, the customs entry that names the importer of record and the duty amount, and the forwarder invoice that bills it. A duty line billed to the seller on an order marked CIF, CPT, DAP or FCA is grounds for a query.

In the invoices audited on our platform in the first nine months of 2026, taxes, duties and customs charges made up about 9 per cent of everything billed on freight invoices, across at least three clients. They sit on the same invoice as the freight, and under a DAP sale import clearance and local import taxes would normally be borne by the buyer, subject to the sales contract. Each such line on a seller's invoice is grounds for a query, not proof of an error. An incoterms freight invoice check needs one field the invoice does not carry: the Incoterm on the order, which the post on reconciliation without ERP integration shows how to bring alongside the invoices.

Why does a wrong Incoterm go unnoticed at invoice approval?

Because the duty line is checked as a number by someone who does not see the order. Duties are pass-through amounts, so many approval workflows route them straight to posting, while the Incoterm sits in the sales or purchasing system and the customs entry with the broker. Typically no step puts the three side by side, and a correct amount billed to the wrong party passes every check that looks at the amount alone.

What should you check on Monday?

Duty lines are where a freight audit meets the sales contract, and neither side usually holds both documents. Our Invoice Approval module checks every invoice line against contracted rates and flags charges with no contracted rate before the invoice is approved, so a forwarder fee with no agreed basis surfaces as an exception rather than being posted as a pass-through. The Incoterm still has to come from the order, which is why the analysis below works from shipment data as well as invoices.

Free freight audit, 100 shipments

We audit 100 of your shipments and show you the savings.

• You send 100 recent invoices with the matching shipment data and rate agreements, as file exports.
• We check every line against the contracted rates and the shipment data and return the lines that do not match, with the reason for each.
• You see which duty and fee lines do not match the shipment and rate data, ready to check against the Incoterm on each order.

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