In recent years, the ease of ordering online from our own homes has made e-commerce one of the most popular ways for EU consumers to purchase goods. When you buy goods online that are already located in the EU at the time of sale, there are no customs formalities and Value-Added Tax (VAT) is already included in the final price you pay at checkout. However, consumers should be aware that ordering goods online that are located outside the EU at the time of sale, will result in a customs declaration being made and may result in customs duties and handling fees being incurred. Furthermore, import VAT may be charged to the consumer on delivery if the seller of the goods has not already charged VAT on the product and remitted it via the EU Import One Stop Shop.
Ordering goods online that are dispatched from a non-EU country
When you buy a product from a non-EU country, VAT is payable on your purchase irrespective of the value of the goods. In addition to VAT, you may also have to pay customs duties for goods above €150 and excise duty for specific goods. If the terms of sale do not specify another arrangement, the goods can be held by the customs authority at entry, pending the payment of duty and tax, amongst other reasons (if the goods are prohibited in the EU, for example).
Possible charges on import
When you buy online from a non-EU country, VAT must also be paid, just as if you ordered goods that are already located within the EU. The VAT is either paid at the point of purchase on the website (for example, when you buy from a seller who is registered to use the Import One Stop Shop for VAT), or the postal operator or courier may collect the VAT from you on delivery.
Information on the VAT, customs duties and other charges due should be clearly explained on the website, and if they cannot be calculated in advance, you must be informed that additional charges may be payable. Ask assistance from the website to estimate how much more money you will have to pay and compare the price with other offers. In general, traders from non-EU countries selling to consumers in the EU must comply with EU law, including EU consumer law.
One easy way to check if VAT has been included in the price or not is to check whether the website is signed up to the EU Import One Stop Shop for VAT. If they are, VAT will already have been included in the price you have paid at the moment of purchase. Most of the biggest online platforms have signed up to the Import One Stop Shop.
Customs clearance fees
Customs clearance for release for free circulation is the documented permission granted by the national customs authority in the EU to allow the goods to be used or consumed in the EU. This permission is given to the person that declared the goods to customs. For e-commerce goods, it is typically a shipping agent (postal operator or courier) that will charge you a customs clearance fee for complying with the necessary formalities. The permission is proof that all applicable customs formalities have been completed, including the payment of duties, and the shipment is free to be used or consumed.
These charges can vary from company to company. An overview of charges applied by Universal Service Providers for postal services in the EU as of June 2022 is available here.
Goods for which you do not have to pay customs duties (e.g. with total value lower than €150) are also subject to customs clearance.
Customs officers examine packages arriving from outside the EU in order to:
- control goods that are not allowed or restricted in the EU
- confirm that the description and value stated on the customs declaration is correct and
- check the Customs Declaration to determine if customs duty, excise duty and/or Import VAT are chargeable.
Depending on the goods you order, you may receive an invoice for excise duties from the customs authorities, your postal operator or the courier. This invoice must be paid before the goods are handed over to you.
Some commercial websites may offer to show a value on the customs declaration that is much lower than the actual price paid so that you don't have to pay duty and/or pay lower VAT. This may also result in seizure of the goods and/or additional costs and possible a fine at delivery.
VAT in detail
Import VAT is calculated as a percentage (VAT rate) of the taxable amount. The VAT rate is the one applicable in the country where the goods are being delivered. You can check the VAT rates applied on various goods in each country through the Taxes in Europe database.
The VAT taxable amount is made up of the customs value plus taxes, duties, levies and other charges, such as shipping and insurance costs. Remember: the import VAT may either be included in the overall delivery price or not.
If the import VAT is not included in the price paid to the seller, you will have to pay it to the postal company or express courier, or directly to the customs if you clear the goods at customs yourself. In the latter case, the procedure differs according to the country of import.
If you pay “all inclusive”, you will be paying import VAT to the seller when paying the total price at the moment of purchase. But if the import VAT is not properly estimated by the seller, or if the seller fails to ensure the transfer of this VAT amount to the tax authority, national legislation can hold you jointly liable.
You should check with your national tax administration (national links/websites, which has competence in this matter.
Customs duty in detail
On the basis of the data provided in the customs declaration, the supporting documents that accompany it and any information which they may request, the competent customs officers determine, impose and collect Customs duties that are due.
Customs duty is typically calculated as a percentage of the customs value of the goods:
The percentage or rate varies depending on the type of goods. You can check the tariff applicable in the TARIC database.
The customs value is based on the price paid for the goods.
Customs duty is not due for goods, provided directly to the buyer when their value does not exceed €150, excluding transport and insurance costs. This relief does not apply to perfumes and toilet waters, tobacco or tobacco products and alcoholic products which are subject to special duty-free limits on the quantity provided.
In some cases, additional duties may be charged, depending on the country of manufacture of the goods. The TARIC database covers all measures relating to tariff, commercial and agricultural legislation.
The customs declaration in detail
The customs declaration provides information to the customs authorities about the goods that you are importing. This declaration must be submitted by a person established in the EU or their representative who is able to present the goods to customs. This person is typically the buyer (i.e. the importer) that ordered the goods..
If you are the person who submits the customs declaration, a courier company may offer to make the declaration on your behalf, but there is normally a charge for this service. If you are not the person who submits the customs declaration, you should verify with the supplier that it is submitted. The customs declaration should indicate correctly the nature of the goods and their value not taking into account taxes, charges, transport or other additional costs.
It is in the customer's own interest to make sure that the declaration has been submitted and is accurate. If no declaration is made, or the information in it was found to be inaccurate, the acceptance of the declaration, and thus the delivery of the package to you may be delayed or even not take place as the customs officials are entitled to make further enquiries and impose penalties and sanctions.
The customs authority carrying out the customs clearance is entitled to open and examine any package if it considers this appropriate. Packages might even be seized by customs and, when appropriate, destroyed.
Excise duty in detail
Excise duties are indirect taxes on the sale or use of specific products, such as alcohol and tobacco, and are payable on these goods on entry into the EU. EU legislation sets out only minimum levels of excise duty above which individual Member States are free to set their own rates. You can check the excise duty rates applied on the goods concerned through the Taxes in Europe database. Besides the list of excise products at EU level, Member States have national lists of excise products with their own excise rates, which may vary from one Member State to another. The goods will be held by the Customs Authority at entry into your country, pending the payment of excise duty.
You should check with your national tax administration (national links/websites), which has the competence in this matter.
For a full overview of the EU countries and certain territories where EU rules regulating customs, VAT and excise apply or do not apply, please check here.