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Customs & VAT

VAT and customs on imports into the EU: who pays what, and when

Duty is a cost. Import VAT usually is not — it is cash flow. Confusing the two produces prices that are either uncompetitive or unprofitable.

China → France

Two different charges arrive at the European border and they behave in opposite ways. Customs duty is a real cost that stays in the product's price. Import VAT is generally recoverable by a VAT-registered business, so it affects when money moves rather than how much is ultimately spent — but it still has to be financed at the moment of import, which for a growing importer is a genuine constraint.

What determines the duty

  1. The tariff classification — the code assigned to your product. Two plausible codes can carry different rates, so this is worth getting right formally rather than guessing.
  2. The customs value — broadly what was paid for the goods plus certain costs, depending on the incoterm.
  3. The origin — where the product was actually made, which is a technical determination, not simply where it was shipped from.

Who is the importer, and why it matters

The incoterm decides who declares the goods, pays the duty and advances the VAT. Selling on terms where you are responsible at destination makes life simple for your European customer and complicated for you: it generally implies a VAT registration and an established presence to recover what you advanced. Selling on terms where the buyer imports is simpler for you and puts the administrative burden — and a real cost — on them, which they will price into what they are willing to pay.

Three things that avoid a blocked shipment

  • An invoice that matches the goods exactly: description, quantity, value, currency and terms. Vague descriptions cause inspections.
  • A classification agreed with your customs agent before the first shipment, not improvised at the border.
  • Conformity documents available when asked. Customs and market surveillance are different authorities with different questions, and both can stop goods.

Under-declaring a value to reduce duty is not a saving; it is a customs offence that exposes the importer, who will be your customer or you. Any supplier proposing it is proposing that someone else carry a risk.

Where to read it yourself

Official pages, opened and checked on 26 September 2026. Where a rule changes, these are the addresses that change with it — this article does not.

Questions we get on this.

Is import VAT a real cost when selling into the EU?

For a VAT-registered business it is generally recoverable, so it affects cash flow rather than final cost. It still has to be financed at the moment of import, which matters for a growing importer. Customs duty, by contrast, is a genuine cost that stays in the price. Confirm your specific situation with an accountant, since rules and deferment schemes differ by member state.

Keep reading on this.

China sourcingIncoterms for importing from China: EXW, FOB and DDP in practiceThree letters decide who arranges what, who pays when something goes wrong, and how comparable two quotes actually are.EU complianceWho is legally responsible for your product in the European UnionSelling into Europe means someone established in Europe carries obligations for the product. Deciding who, early, avoids discovering it at customs.France / EuropeSetting a European price when you come from ChinaA price that is too low does not win the deal. It changes what the buyer thinks the product is, and that judgement is hard to reverse.Customs & VATGetting paid in Europe: terms, delays and what the law gives youEuropean buyers expect to pay after delivery, not before it. That is normal here, it is bounded by law, and the protections only work if they are written into the contract before the first shipment.

If this raised a question about your own project, tell us where you are — the first conversation usually clarifies more than a proposal.

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