Goods imported into the European Union from third countries are generally subject to duties in the form of tariffs. Due to the function of the EU as a customs union, no customs duties are due on the movement of goods within the EU member states. The administration and collection of customs duties is the responsibility of the individual EU states. The EU is entitled to the customs revenues. The average customs revenue is around 5 billion euros. It is one of the EU’s sources of revenue.
Customs duties
Value of goods
The duty-free limit of EUR 22 was abolished on 1 July 2022. Up to a goods value of EUR 150, imported goods are considered “low-value goods”. Here, only the VAT must be paid on the goods, and the import is duty-free.
If the value of the goods exceeds EUR 150, the import becomes subject to customs duty. For this purpose, the VAT, and a percentage customs duty on the purchase price (incl. shipping costs) must be paid. However, the customs rate depends on the product.
Customs rates
Customs duty rates vary widely and are often adjusted. On the site www.tariffnumber.com, for example, you will find a complete overview, including any trade restrictions.
Import VAT
When importing goods with a value less than 150 euros, the currently valid VAT is charged on the total purchase price. Shipping and insurance costs are added to the value of the goods. The basis for calculating import duties is the so-called transaction price of the goods.
The import VAT corresponds to the turnover tax or value-added tax incurred when buying or selling goods and services in Germany or within the EU. The import VAT is a consumption tax and an import duty in the sense of the customs regulations. In Germany, the customs administration levy it. Both companies and private individuals are liable to pay the tax.
The basis of the tax is that goods abroad are exempt from VAT. Still, in Germany, or the EU, they should not reach the customer without this turnover tax. Taxation at import avoids this.
Who has to pay import VAT?
Anyone who receives goods from a non-EU country must pay import VAT.
How is import VAT calculated?
The customs office first determines a customs value to determine the import VAT. In addition to the value of the goods, this value also includes foreign taxes and shipping costs. Customs duty is calculated from this. The customs value plus the customs amount and transport costs serve as the basis for calculation. The import turnover tax in Germany is 7 or 19 per cent of the assessment basis.
Allowances:
- Commercial import: 150 euros
- One-off gift consignment to a private individual: 45 euros
Companies may claim the import turnover tax as input tax if they are not exempt from statutory turnover tax as a small business.
On our knowledge page on import VAT, you will find additional information on the regulations and procedures.
Customs declaration
All goods under a customs procedure shall be declared for that procedure, irrespective of their status as Union or non-Union goods.
Anyone who has all the necessary information and documents and can present the goods can make the declaration. In most cases, declarants can also be represented directly or indirectly. This applies, for example, when using forwarding agents or other individuals authorised to represent the goods.
Customs offices are divided into border customs offices – entry and exit channels for the movement of goods into and out of the EU customs territory – and internal customs offices – contact points for all questions regarding the import and export of goods.
The customs declaration can be submitted electronically (in Germany via the ATLAS platform), in writing, orally or by an act deemed to be a customs declaration.
The documents required for the declaration include documents that prove the value, origin, or identity of the goods, determine the amount of duty or help to identify any prohibitions and restrictions that may exist:
- Accuracy and completeness of the particulars in the customs declaration.
- Authenticity, accuracy, and validity of all documents submitted
- Fulfilment of all obligations arising from the customs procedure declared
The consignee will not have access to his goods until they have been declared for a customs procedure and released by the customs office.
Customs tariff number
The customs tariff number, or commodity code, is a combination of numbers that guarantees conclusions about the nature of a good and is accepted throughout the territory of the World Trade Organisation (WTO). It is used to determine import and export regulations. The customs tariff number can therefore be used to determine whether the goods to be shipped are subject to an import or export ban or reservation. Furthermore, it is used to determine any export duties and the rate of excise duty. A customs tariff number can have different lengths. An 8-digit number must be entered when exporting goods. For the import of goods, three additional digits are added. This can be used, for example, to record anti-dumping rules and national provisions regarding turnover tax, prohibitions, or restrictions.
EORI
The EORI number for cross-border trade with non-EU countries simplifies customs clearance. The EORI number enables the unique identification of economic operators and other individuals in their relations with the customs authorities. It also makes the movement of goods more verifiable.
Learn how to apply for an EORI number and how to use it in trade and customs within and outside the EU.
IOSS – the EU’s Import-One-Stop-Shop
The IOSS procedure is a special VAT regulation for “distance sales” of goods traded in e-commerce that has been in effect throughout the EU since 1 July 2021. The IOSS special scheme allows online traders to submit the sales covered by the IOSS procedure in a single tax return to a central office (in Germany, the Federal Central Tax Office, BZSt). The IOSS procedure applies in all EU member states. Each EU member state establishes a “one-stop-shop” for imports, the Import-One-Stop-Shop, IOSS.
Foreign trade statistics
Foreign trade statistics are used to record the movement of goods of all movable property, live animals and electricity on import and export across the borders of the Federal Republic of Germany – the ATLAS procedure. In Germany, the Statistische Bundesamt (Federal Statistical Office) compiles foreign trade statistics every month based on the reports on imports and exports of goods from and to the individual countries.
The basis for this is trade with EU member states (intra-trade) and with third countries (extra-trade) and trade in goods imported or exported free of charge or on the foreign account.
