Goods imported into the European Union from third countries are generally subject to duties in the form of tariffs. Due to the EU’s function as a customs union, no customs duties are levied 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. Customs revenues are due to the EU. The average customs revenue is around 5 billion euros. They are one of the EU’s sources of revenue.
Customs duties
Value of goods
The duty-free limit of EUR 22 has been abolished since 1 July 2022. Up to a goods value of EUR 150, imported goods are considered “low-value goods” and are duty-free. Here, only the import VAT must be paid for 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, VAT and a percentage of customs duty on the purchase price (incl. shipping costs) must be paid. However, the customs rate depends on the product.
Customs rates
Tariff 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 of less than EUR 150, the applicable import VAT is levied on the total purchase price. The shipping and insurance costs are added to the value of the goods. The basis for calculating the import duties is the so-called transaction price of the goods.
The import VAT corresponds to the VAT incurred when buying or selling goods and services domestically or within the EU. The import VAT is a consumption tax and an import duty in the sense of customs regulations. In Germany, the customs administration levies it. Taxable persons can be companies, stationary trade, online traders and online marketplaces, and private individuals.
The basis of the tax is that goods are exempt from VAT abroad, but should not reach the customer in Germany or the EU without this VAT. Taxation on importation avoids this.
Who has to pay import VAT?
Anyone receiving goods from a non-EU country must pay import VAT.
How is import turnover tax calculated?
To determine the import VAT, the customs office first determines a customs value. In addition to the value of the goods, this also includes foreign taxes and shipping costs. Customs duty is calculated from this. The customs value plus the customs amount and transport costs are the basis for calculation. In Germany, the import VAT amounts to 7 or 19 per cent of the assessment basis.
Allowances:
- Commercial import: 150 EUR
- One-time gift consignment to a private person: 45 EUR
Businesses may claim import VAT as input tax if they are not exempt from statutory VAT as small businesses.
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 with all the necessary information and documents to present the goods can make the declaration. In most cases, customs declarants can also be represented directly or indirectly. This applies, for example, when using forwarding agents or other persons 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 may 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 proving the value, origin, or identity of the goods, determining the amount of duty or helping to identify any prohibitions and restrictions that may exist:
- Accuracy and completeness of the information in the customs declaration
- Authenticity, accuracy, and validity of all documents submitted
- Fulfilment of all obligations arising from the declared customs procedure
The consignee does 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 guarantee 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 determines export duties and the excise duty rate under tax law. 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. These can be used 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 persons 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 it is applied in trade and customs inside 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 force throughout the EU since 1 July 2021. The IOSS special scheme allows online sellers 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 of the EU member states 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. The Federal Statistical Office compiles foreign trade statistics monthly based on the reports on imports and exports of goods from and to individual countries.
The basis for this is trade with EU member states (intra-trade) and third countries (extra-trade), as well as trade in goods, imported or exported free of charge or on the foreign account.
Import customs clearance in Great Britain
Great Britain ceased to be part of the EU single market and customs union on 1 January 2021. This has a significant impact on the movement of goods. What do companies need to keep in mind when clearing customs?
Customs regulations between Switzerland and the EU
Customs regulations must be observed for the movement of goods between Switzerland and the European Union (EU). What goods may be imported? And what exemption thresholds apply?
