Import Duties, Value Added Tax, Consumption Tax In European And American Markets

In the import process, whether it is buyers from the United States, Britain, and Germany, they must pay import duties and some other taxes to the local customs when importing. For example, some countries will levy import value-added tax, while some countries will not levy other import fees. Next, let's take a look at the common problems of paying import duties, value added tax, and consumption tax in European and American markets.

Import duties

The first is import duties. The amount and rate of goods subject to import duties in the United States and Europe are not the same, and there are obvious differences. In terms of import duties, what is the base of the US and European countries? The United States is mainly based on the FOB amount of goods, and its import duties is calculated as FOB amount * duties rate; while for EU countries, it is mainly calculated based on the CIF amount of the goods, and its import duties is calculated as (amount of goods + Ocean freight + insurance premium) * duties rate. Almost all EU countries use CIF to calculate import duties.

The other is to find the duties rate of import duties and the duties rate of the United States. We can use HTS to find the corresponding HTS code of the United States, and then find the subdivided duties rate of the product. For European countries, the corresponding import duties rate can be found through HS code. Generally, the search term is country name + duties. You will find the government website of the corresponding country, such as in the UK, where there will be a lot of information about the code and duties rate of British imports.


Then comes VAT. There is a big difference between the United States and the EU countries regarding VAT. The United States mainly collects taxes through income taxes, sales taxes, and other taxes, so the United States does not levy VAT; while EU countries will collect imported VAT when importing, and when selling in the domestic market, a VAT invoice needs to be issued, setting out the price of the product as well as the taxes and fees.

The common value-added tax standard in many EU countries is 20%. A few countries fluctuate above and below this value. The specific value-added tax rate for each country can be searched on Google ’s Wikipedia. What about VAT imported by EU countries? It is calculated based on the CIF amount of the goods, plus import duties and possible costs, all the total cost and amount * 20%.

Therefore, when we are customers in the European and American markets, the price competition in some countries is fierce, and there is also the part of the European Union countries levying value-added tax, which causes a lot of cost. At this time, we will find that although the quoted prices and profit margins are the same, the acceptance of prices by customers in different markets is different.

Sale tax

Finally, the consumption tax, US Customs does not levy value-added tax and consumption tax, only import duties and other import miscellaneous fees, such as,cargo handling fee (MPF), port maintenance fee (HMF), etc. Although the US federal government does not charge consumption tax, in fact, when your product is produced and sold on a continent in the United States, the corresponding continent will charge consumption tax. And different continents have different tax rates, there will be additional taxes, additional taxes. And the European Union country does not have consumption tax this one statement, only sale value added tax.

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