Impact of the Carbon Border Adjustment Mechanism on VAT and Customs Duties in the European Union

The Carbon Border Adjustment Mechanism (CBAM) is, as the name suggests, a border adjustment mechanism. It is, however, usually (and incorrectly) referred to as a carbon duty or tax. In this article, the author clarifies the distinction that should be made between the CBAM and customs duties and analyses the impact of the CBAM on the customs value and the VAT-taxable amount on importation of goods.