Import duties are calculated as a percentage of the customs value of the import goods, while VAT is calculated as a percentage of the sum of customs value and duty. The duty and VAT rates are determined by the tariff classification of the goods and the country of origin. That is why the correct tariff classification of your goods by experienced customs brokers is very important.
Duty = customs value x rate of duty
VAT = (customs value + duty) x VAT rate
Example: Let’s assume that, for importing pens from China, the rate of duty is 4% and VAT is 24%. Therefore, to import pens with a customs value of €10,000, the duty comes to €400 and VAT comes to €2,496 (€10,400 x 24%), thus a total of €2,896 must be paid to the customs office (duty: €400 + VAT: €2.496).
At BMR Customs Brokers, we will accurately calculate the cost of your imported goods in advance so there are no surprises with unexpected charges. Transparency is our priority, and we want to be sure that every time we work together, you will be fully informed of and in control of your expenses.