Import VAT
Duty & Tax Basics · Core Concepts
What is Import VAT?
Import VAT (value-added tax) is the tax a destination country charges on goods entering it from abroad, calculated on the goods' value plus any customs duty owed, and often plus shipping too. It's the import equivalent of the VAT or sales tax charged on domestic purchases.
Unlike customs duty, which only applies to specific goods at specific rates, import VAT is a broad, flat-rate tax that generally applies to nearly every commercial import above whatever low-value exemption a country offers, if any.
Import VAT works like the sales tax you're used to paying at checkout, except it's charged when a product crosses a border instead of (or in addition to) at the till. Instead of only taxing the item's price, it's often charged on the item's price plus any customs duty already added.
When to Use It
Import VAT applies whenever you're comparing the shown price of a foreign purchase to what you'll actually pay - it's usually the single largest charge added after checkout, larger than customs duty for most everyday orders.
A common mistake is assuming VAT is charged only on the item's price. In most systems it's charged on the item's price plus shipping plus any customs duty already applied - so a higher duty rate quietly increases the VAT bill too, not just the duty line.
Frequently Asked Questions About Import VAT
Does import VAT apply even if customs duty doesn’t?
Often, yes. Many countries have a separate, usually lower or nonexistent threshold for VAT than for duty - the EU, for example, charges VAT on nearly every commercial import regardless of value, while duty only kicks in above €150.
Is the VAT rate the seller's country's rate or the buyer's?
The buyer's (the destination country's) rate always applies to an import - the seller's location doesn't change what VAT rate is charged, only whether it's collected at checkout or at the border.
Can a seller collect import VAT at checkout instead of the courier collecting it later?
Yes, in many regions - schemes like the EU's IOSS or the UK's VAT-at-checkout model let a registered seller collect VAT upfront, so the buyer sees one final price with no surprise charge on delivery.
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