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EU: Import VAT - What exporters to the EU need to know

(S) Charging the right VAT when dealing with the EU is often a sticking point for businesses from outside the EU

The EU rules in the field of VAT differ depending on it, you are in the EU or not, as taxable transactions in goods are treated differently.

In the club

The EU rules for cross-border supplies and movements between the Member States concerned the intra-EU supplies and acquisitions of goods; distance sales regime for goods to and from the EU Member States.

Outside the club

Instead, supplies and movements of goods between the EU and third countries are subject to the VAT rules on imports and exports.

This means that goods that are brought into the VAT territory of the EU from the a third country (or are to be taken out of that territory for dispatch or transport to the third country), will be subject to customs supervision and may be subject to customs controls in accordance with the EU’s Union Customs Code.

Introduction to EU Import VAT rules for exporting businesses

For a "foreign" product, VAT will now be due at the importation in the EU, at the rate that applies to the supplies of the same goods within the Member State.

Traditionally, VAT will be payable to customs authorities at the time of importation, unless the Member State of importation allows entering import VAT in the periodical VAT return of the taxable person.

The taxable import VAT amount is based on the value for customs purposes, but increased by

  • taxes, duties, levies and other charges due outside the Member State of importation, and those due by reason of importation, excluding the VAT to be levied, and

  • incidental expenses, such as commission, packing, transport and insurance costs, incurred up to the first place of destination within the territory of the Member State of importation as well as those resulting from transport to another place of destination within the EU, if that other place is known when the chargeable event occurs.

No taxable supply from outside the EU

From a third country's perspective, goods will be exempt from VAT if they are dispatched or transported to a destination outside that country.

However, a business as a supplier of exported goods must be able to prove that the goods have left their country. Usually, it is the certification of exit given to the exporter by the customs office of export.

Download the EU VAT Brexit Notice

VAT for Goods after Brexit - EU Commission Guidance
Download PDF • 669KB

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