Import VAT and customs duty are separate charges. Build the customs-value file first, then test the VAT base before the purchase order is approved.
Two different charges, one landed-cost decision
Customs duty is a border charge that commonly depends on classification, origin, customs value and the tariff route. Import VAT is a consumption tax charged under the importing jurisdiction’s rules. One charge can feed the base of the other, but they are not interchangeable labels and they should not be budgeted as one percentage.
Start with the customs-value file
Before asking for a VAT estimate, establish what the declaration will use as customs value. Keep the supplier invoice, Incoterm, freight and insurance evidence, assists or commissions where relevant, product description, commodity-code work and origin evidence in one file. A duty preference cannot be assumed from a supplier’s country name alone.
Why a duty result can change the VAT result
For EU imports, Articles 85 and 86 of the VAT Directive set the framework: the taxable amount starts from customs value and may include duties and specified incidental costs when not already included. The exact rate, recovery mechanism and deferral options are jurisdiction-specific. Model them only after the importing member state and transaction facts are known.
Use a staged landed-cost worksheet
Use separate lines for goods value, additions to customs value, duty, freight and insurance, import VAT, brokerage and post-border transport. Mark each input as quoted, evidenced or estimated. That makes it clear whether a change is a duty classification issue, a valuation issue or a cash-flow VAT issue.
Questions to close before the purchase order
Confirm importer of record, destination, commodity code, origin evidence, Incoterm, customs value method, who books freight, whether duty relief is available, VAT registration and who funds the border payment. If any answer is provisional, keep the total cost provisional too.
Related reading
Read the EU import VAT guide and the China-to-EU import guide for the next steps. talk to Corpenza.
Primary sources and dates
EU VAT Directive; HMRC customs value; HMRC VAT value. EU VAT Directive, Articles 85–86: consolidated EU text effective 1 January 2025; it sets the import tax-base framework. HMRC customs-value guidance: updated 28 October 2024. HMRC VAT-value guidance: updated 26 September 2025; both are United Kingdom examples, not universal rules.
This is general operational information, not legal, tax or banking advice.
