Learn how to calculate the CIF

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The CIF means Tax identification code and it is an element of administrative identification used by companies and institutions to identify the percentages and tax regimes to which each type of company belongs.

Origin of the merchandise and explanation of the nomenclature

To start we must identify and categorize the tariff nomenclature of the TARIC systemIn other words, the customs system used in the European Union.

The tariff heading has the function of indicating the percentage of tariff and VAT that must be applied in each case, as well as the requirements that must be met, for example, the need to present licenses and other credentials that identify the legal origin of imported merchandise. .

The tariff heading It is provided regularly by the shipper, but we always suggest that importers review the information with their customs broker to avoid future problems.

The CIF Code consists of 9 alphanumeric digits always following the following structure:

TPP 0 0 0 0 0 C

Where:

• T: It is the Organization type card, which can be any of these:A, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, R, S, U, V, W.
• P: Provincial code.
• 0: Sequential numbering that corresponds to it within the province.
• C: Check a digit, a number or a letter

The first digit T It is a letter that indicates the type of company we are working with and can be any of the following:

• A - Public Limited Company.
• B - Limited liability company.
• C - Collective association.
• D - Limited partnership.
• E - Community of assets and recumbent inheritances.
• F - Cooperative society.
• G - Associations.
• H - Community of owners under a horizontal property regime.
• J - Civil companies, with or without legal personality.
• K: old and obsolete format.
• L: old and obsolete format.
• M: old and obsolete format.
• N - Foreign entities.
• P - Local corporation.
• Q - Public body.
• R - Congregations and Religious Organizations.
• S - State Management Bodies and Autonomous Communities.
• U - Temporary unions of companies.
• V - Other types of companies that are not defined in the rest of the keys.
• W - Permanent establishments of non-resident entities in Spain.

The modifications that were introduced can be summarized as:

The letter key G, which was assigned to "associations and other undefined types", becomes 4 subcategories.

G: This includes trade unions, political parties, consumer and user associations, as well as sports federations. It also includes non-profit foundations and Savings Banks.

The next part of the key is the provincial identification that consists of the first two digits that are P and the next 5 digits that are 0, in the example of CIF, of which the first two correspond to the identifier of the province in which the organization is located and the next 5 digits are a sequential or correlative numbering in the same province.

• 01 - Álava.
• 02 - Albacete.
• 03, 53, 54 - Alicante.
• 04 - Almeria.
• 05 - Avila.
• 06 - Badajoz.
• 07, 57 - Balearic Islands.
• 08, 58, 59, 60, 61, 62, 63, 64 - Barcelona.
• 09 - Burgos.
• 10 - Cáceres.
• 11, 72 - Cádiz.
• 12 - Castellón.
• 13 - Ciudad Real.
• 14, 56 - Córdoba.
• 15, 70 - A Coruña.
• 16 - Cuenca.
• 17, 55 - Girona.
• 18 - Granada.
• 19 - Guadalajara.
• 20, 71 - Guipúzcoa.
• 21 - Huelva.
• 22 - Huesca.
• 23 - Jaén.
• 24 - Leon.
• 25 - Lleida.
• 26 - La Rioja.
• 27 - Lugo.
• 28, 78, 79, 80, 81, 82, 83, 84, 85 - Madrid.
• 29, 92, 93 - Malaga.
• 30, 73 - Murcia.
• 31 - Navarra.
• 32 - Ourense.
• 33, 74 - Asturias.
• 34 - Palencia.
• 35, 76 - Las Palmas.
• 36, 94 - Pontevedra.
• 37 - Salamanca.
• 38, 75 - Santa Cruz de Tenerife.
• 39 - Cantabria.
• 40 - Segovia.
• 41, 91 - Seville.
• 42 - Soria.
• 43, 77 - Tarragona.
• 44 - Teruel.
• 45 - Toledo.
• 46, 96, 97, 98 - Valencia.
• 47 - Valladolid.
• 48, 95 - Vizcaya.
• 49 - Zamora.
• 50, 99 - Zaragoza.
• 51 - Ceuta.
• 52 - Melilla.

In short with the understanding of a CIF code you must identify the last digit marked with a C, donde pondrás un número o una letra según be el caso:

Legal Character Letter to include in the CIF:

To public limited companies Number

B Number of limited liability companies

C Collective associations Number

D Number of limited companies

E Communities of assets and recumbent inheritances Number

F Cooperative societies Number

Number of associations G

H Communities of owners Number

J Civil companies, with or without legal personality Number

N Letter from foreign entities

P Letter from local corporations

Q Letter from public bodies

R Congregations and religious organizations Charter

S Charter of State Management Bodies

U Number of temporary union of companies

V Other types not defined in the rest of the keys Number

W Establishments of non-resident entities in Spain Letter

How to calculate the CIF

Toda mercancía que llegue a la Unión Europea procedente de otras partes del mundo, debe ser debidamente despachada para que pueda acceder legalmente y ser aprobada oficialmente, aún cuando existen algunas excepciones dependiendo del target de la importación, o mejor dicho, del régimen que se tenga. debe aplicarse de acuerdo a los múltiples casos que se puedan presentar: a modo de ejemplo, perfeccionamiento activo o pasivo, importación temporal, entre otros.

As a consequence of this merchandise legalization procedure, the importer must pay taxes: VAT and customs clearance duties. So how are these taxes determined?

Customs value or CIF value of the merchandise

Once we know the origin and destination of the merchandise, then we determine the CIF value of it, for this we apply the percentage of the tariff, to obtain the cost of the Import Tariff.

Then, based on these amounts, we can calculate the VAT base, which is made up of the sum of the following items:

• Customs value
• Import Duties
• Port fees identified with the code (T3)
• Discharge and manipulation known with the key (THC)
• As we have the VAT base, we can apply that percentage
• Calculate VAT and Tariff on imports

To explain the concept a bit, we will show you an example of tax calculation on an import:

CALCULATION OF TAX ON A CHINA FCL MARITIME IMPORT

Let's suppose a maritime import from China, where the following particular expenses have occurred:

In China:

• 450 USD: freight from the supplier's warehouse to the loading of the container on the ship
• 1000 USD: ocean freight

Expenses in Spain:

• 170 EUR: Unloading and handling
• EUR 50: port fees
• 200 EUR: Transport from the ship to the importer warehouse
• 150 EUR: Rest of expenses such as documentation and procedures.

More information:

7,500 USD, value of the merchandise.

Merchandise: denim pants

The customs agent informs us that the tariff item to apply is 6103.4200 / 00, which is related to a 12% tariff in the case of coming from China, and a VAT 21%.

You must first convert to EUR, and for this the official change provided by Customs is applied on a monthly basis. For the examples we will take as the exchange price 1 USD is equal to 0.72 EUR.

Let's see the tax calculation for an import. in FOB conditions, based on the information previously presented:

Concept	Dollar amount	Amount Euros
Merchandise value	$ 7.500,00	5.400,00 €
Freight cost	$ 1,000.00	€ 720,00
Insurance (3/1000)	$ 22.50	€ 16,20
	Total	6.136,20 €

We must apply the percentage of the corresponding tariff, according to the tariff heading and the place of origin of the merchandise:

Customs value	6.136,20 €
Duty 12%	736,34 €
Total	€ 6.872,54

The VAT base is obtained with the sum of several necessary concepts:

Customs value + customs value 12%	€ 6.872,54
THC	170,00 €
T3	50,00 €
Total	7.092,54 €

And on the basis of VAT, we can apply the VAT percentage

VAT base	7.092,54 €
21% VAT	€ 1.489,43

It can then be said that the taxes on this import would then be: 736.34 Euros of Tariff, and 1,489.43 Euros of VAT.

If you can appreciate in detail, this procedure is an equation with two unknowns, in which we must be very clear about the original concepts and the information collected based on reading the CIF Code, to correctly calculate the rates that you must pay to Importa any type of merchandise, it will be enough to know its CIF to apply the knowledge you have read here, try to base yourself on the example and the tables to start practicing, you do not need to be a mathematical expert, that of equations is another simple way to solve, but You must first familiarize yourself with the necessary basics.