Import VAT in the European Union

Import VAT generally arises when goods are imported and uses a taxable amount that may exceed the goods value alone.

Definition

Import VAT is a tax charged on the importation of goods. Its taxable amount normally builds on the customs value and may include customs duty, other charges and certain incidental costs up to the first place of destination. The rate, debtor and right to deduct depend on the specific transaction.

Why does it matter?

Goods that are free of customs duty may still attract import VAT. Cash flow, billing and input tax evidence depend on identifying the importer and documenting the import correctly.

Key points

  • Do not confuse duty-free treatment with VAT exemption.
  • Confirm the importer and person liable before dispatch.
  • Retain the assessment and import evidence for accounting.

Practical example

A shipment enters Germany from the United States. In addition to customs value, the costs required by VAT rules are reviewed for the taxable amount.

Common mistakes

  • Calculating import VAT on invoice value only
  • Agreeing DDP without resolving importer and registration questions
  • Assuming input tax recovery without appropriate import evidence

General professional information, not legal or customs advice. Requirements may vary by goods, route and current regulations.