Customs, VAT and compliance when importing from China into the EU

1. The customs value is the basis for everything

Duty is not calculated on your invoice alone. The customs value is normally the transaction value plus all costs incurred up to the EU border: freight, insurance and any handling on the way. With a CIF or DAP purchase those costs are already inside the price; with FOB you add them yourself.

Import VAT is then calculated on the customs value plus the duty amount plus transport costs inside the EU up to the first destination. VAT-registered businesses can normally deduct import VAT as input tax, so duty — not VAT — is the real cost driver.

2. Worked example

The duty rate depends entirely on the commodity code. Rates in the EU range from 0% to well above 10%, so classify the product before you price it.

3. Find your commodity code first

Every product has a code in the EU customs tariff. The code determines the duty rate, whether anti-dumping duties apply, and which import restrictions or licences are relevant. Check it in the EU TARIC database before placing an order — a wrong code can turn a profitable product into a loss-making one, and corrections after import are expensive.

4. Documents you need

• EORI number — the identifier every EU importer needs; apply once, free of charge.
• Commercial invoice with exact product description, quantity, value, Incoterm and origin.
• Packing list with carton count, weights and dimensions.
• Bill of lading or air waybill as the transport document.
• Certificate of origin where a preferential rate or origin marking is claimed.
• Product documentation: test reports, declaration of conformity, technical file.

5. Product compliance: CE marking and GPSR

Customs clearance is not permission to sell. Whoever imports from outside the EU becomes the responsible economic operator. That means holding the technical documentation, issuing or verifying the EU declaration of conformity, applying the CE mark where the product falls under a CE directive, and providing instructions and warnings in the language of the market.

Since the EU General Product Safety Regulation applies, every product needs a responsible person established in the EU, and online listings must show manufacturer and importer contact details, product identification and safety warnings.

6. Five mistakes that cost money

1. Guessing the commodity code instead of verifying it in TARIC.
2. Understating the invoice value — this is customs fraud, not an optimisation.
3. Forgetting anti-dumping duties, which can exceed 40% on some goods.
4. Ordering mass production before compliance testing is complete.
5. Ignoring packaging, battery and WEEE registration obligations.