Question 1

How do I calculate import VAT on goods from China?

Accepted Answer

To calculate import VAT on goods from China, add the product value, shipping costs, and any customs duty together to get the taxable base. Then multiply by the importing country's VAT rate. For example, importing €1,000 worth of goods to Germany (19% VAT) with €100 shipping and €50 duty: (€1,000 + €100 + €50) × 19% = €218.50 in import VAT.

Question 2

What is the difference between import VAT and customs duty?

Accepted Answer

Import VAT (Value Added Tax) is a consumption tax applied to imported goods at the same rate as domestic goods, typically ranging from 5% to 27% depending on the country. Customs duty is a tariff imposed on goods crossing international borders, calculated as a percentage of the product value based on its HS code classification. Both are separate charges — duty is applied first, then VAT is calculated on the total including duty.

Question 3

Can businesses reclaim import VAT?

Accepted Answer

Yes, VAT-registered businesses can generally reclaim import VAT on their VAT return, making it a cash-flow cost rather than a final expense. In the EU, import VAT is recoverable as input tax if the goods are used for business purposes. In the UK, postponed VAT accounting allows businesses to account for import VAT on their VAT return instead of paying it at the border. Non-EU businesses may also reclaim VAT through specific refund procedures depending on reciprocal agreements.

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