What are the most important rules and aspects regarding imports of goods?
When importing goods in a VAT/GST jurisdiction from a country outside that jurisdiction, in principle customs duties and VAT/GST on importation are due. Within a Customs Union, the countries that form part of that Union generally do not levy customs duties on goods imported from other countries within that same Union. Within the EU, there is a Customs Union. Therefore, goods may move freely within that Customs Union, without being subjected to customs duties or VAT on importation. However, within the EU other rules have been put in place in order to ensure that VAT taxation takes place in the country of destination of the goods.
Customs duties differ from VAT/GST on importation in the sense that VAT/GST is not intended as a tax on businesses and is therefore in principle recoverable. Customs duties can in principle not be recovered.
Customs duties and VAT/GST on importation are collected from the importer when the goods are released from customs control. When importing goods in a VAT/GST jurisdiction, a value (taxable amount) for importation must be determined. In general, both customs duties and VAT/GST on importation are calculated as a percentage of the value of the imported goods to which costs such as (but not limited to) freight and insurance costs may need to be added. Often, this will be a transaction value. The customs duty rates as well as the VAT/GST rates vary depending on the type of goods and the jurisdiction concerned. Sometimes, exemptions or a relief applies. In particular, exemptions for small consignments / importation of relatively low value goods may apply for both customs duties and VAT/GST, depending on the jurisdiction of importation concerned. Most OECD countries apply such a VAT relief arrangement, with thresholds varying widely across countries.
Many jurisdictions offer the possibility to postpone or – in special situations – recover the payment of customs duties by placing the goods under special customs regimes. These regimes, their conditions and their functioning differ per country. Usually, a postponement of customs duties also entails a postponement of payment of VAT/GST on importation.
- , Consumption Tax Trends 2014 ' <http://dx.doi.org/10.1787/ctt-2014-en> (December 2015)