by on August 7, 2024 with No Comments

When your company buys goods from suppliers outside the EU (e.g. the UK, the USA, China, Switzerland, etc.) and brings them into Europe, it is carrying out an import when clearing customs. If customs clearance takes place in a European country other than your own, it is essential to understand and manage the VAT procedures for these imports.

To avoid getting bogged down, adopt the right VAT reflexes straight away.

Who pays import VAT?

The concept of importer for customs purposes is different from that of importer for VAT purposes: an importer under customs regulations is not necessarily an importer for VAT purposes, and vice versa.

When you import goods into Europe, it is crucial to know who can be designated as the importer for VAT purposes. In principle, this is the company that owns the goods at the time of customs clearance. If the company named on the import document (D.A.U.) is not the owner of the goods, this will lead to complications and it will not be able to reclaim the VAT paid to customs

Does VAT have to be paid at the time of customs clearance?

VAT is normally due when the goods are cleared through customs. However, there are various ways of bringing goods into the EU without having to pay VAT immediately: customs warehousing, temporary admission, transit, etc.

Most European countries have also introduced a postponed accounting method into their domestic legislation, enabling businesses to declare and pay VAT in their VAT return rather than at customs.

Do I need to obtain a VAT number in the importing country?

VAT importers must normally obtain a VAT number in the country where they are going to import the goods.

In some countries, however, such as Belgium or the Netherlands, it is possible to use a global representative to lighten the VAT formalities. This solution is often sought when imports into a particular country are occasional.

The VAT expert's eye

Many companies contact us in a hurry because they have goods on their way to Europe and they realise the VAT implications too late. The customs agent knows the procedures for clearing goods through customs, but doesn't consider the potential VAT implications.

When it comes to VAT, it's better to think twice before clearing customs in certain European countries. Once the goods have cleared customs, it's very complicated to make any corrections. The result is a potential dispute with the local authorities over the refund of local VAT paid on importation.

Have a question about about importing into Europe? We offer a free video conference to assess your situation and propose a tailor-made solution.