{"id":11894,"date":"2020-10-29T11:18:32","date_gmt":"2020-10-29T11:18:32","guid":{"rendered":"https:\/\/www.nextsmartship.com\/2020\/10\/29\/uk-duty-vat\/"},"modified":"2025-01-06T15:25:32","modified_gmt":"2025-01-06T07:25:32","slug":"uk-duty-vat","status":"publish","type":"post","link":"https:\/\/www.nextsmartship.com\/blog\/uk-duty-vat\/","title":{"rendered":"What You Must Know About UK DUTY &#038; VAT"},"content":{"rendered":"\r\n<p>The UK withdrew from the EU on 31<sup>st<\/sup> January, and the transition period will run until 31<sup>st<\/sup> December 2020. There are only nine weeks to count down before that. The obligation for customs clearance of goods moving between the UK and the EU will start when the transition period is over.<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-6255\" src=\"https:\/\/www.nextsmartship.com\/wp-content\/uploads\/2020\/10\/shopify-1-1.jpg\" alt=\"What You Must Know About UK DUTY &amp; VAT\" width=\"1024\" height=\"512\" \/><\/figure>\r\n\r\n\r\n\r\n<p>In this case, it is better to know more about the specific calculation method of Duty and Value added tax(VAT) in the EU. After The UK left the European Union, the EU is now a club of 27 members (Germany, France, Spain, Italy, Austria, Belgium, Bulgaria, Cyprus, Croatia, the Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden. EU will charge on tax\u00a0 if the product value exceed EUR22)<\/p>\r\n\r\n\r\n\r\n\r\n\r\n<p>There are three kinds of taxes on imported goods: Duty, VAT, and consumption tax. Since the consumption tax is only applicable to specific types of goods, such as alcoholic drinks, tobacco, and energy commodities, while most goods sold on the cross-border e-commerce platforms are general goods, the imported goods are mainly subject to the first two kinds of taxes \u2013 Duty and VAT. The duty belongs to national taxation, and value-added tax belongs to custom tax. Therefore, we will usually use duty + VAT directly when we are calculating the EU tax.<\/p>\r\n\r\n\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">Duty<\/h2>\r\n\r\n\r\n\r\n<p>Duty refers to the tax imposed on goods when transported across international borders.<\/p>\r\n\r\n\r\n\r\n\r\n\r\n<p>In 1968, the EU countries implemented the customs union policy, which has been maintained till now. The policy stipulates that the tariffs and quantity restrictions in the trade of goods among The EU member countries are completely eliminated to flow freely in the member countries. The movement of goods between EU member states is not regarded as imports or exports, but as Arrivals and Dispatches, and therefore does not incur any tax. For member countries, it is stipulated that imports from non-EU member countries are subject to the same restrictions so that imports from third countries are subject to the same import duties regardless of which country they enter the EU.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">VAT<\/h2>\r\n\r\n\r\n\r\n<p>VAT stands for value-added tax, a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. In 1954 France became the first country to adopt the VAT on a large scale. It served as an improvement on the earlier turnover tax, which vastly increases the fiscal revenue, and soon became popular all over the world.<\/p>\r\n\r\n\r\n\r\n\r\n\r\n<p>Different rates of VAT apply in different EU member states, 20% in Britain, 20% in France, 19% in Germany, 22% in Italy and 21% in Spain, 25% in Denmark and Sweden, from the minimum 17% in Luxembourg to the maximum 27% in Hungary.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">The formula of Calculating Duty &amp; VAT<\/h2>\r\n\r\n\r\n\r\n<p>Duty = Declare value * Duty rate (Depends on products)<\/p>\r\n\r\n\r\n\r\n<p>VAT = ( Declare value + Transport cost + Custom Duty + VVA)* VAT Rate<\/p>\r\n\r\n\r\n\r\n<p>VVA &#8211; Vat Value Adjust only applies to the United Kingdom; other EU countries do not need.<\/p>\r\n\r\n\r\n\r\n<p>VVA calculation<\/p>\r\n\r\n\r\n\r\n<p>Air Freight: 0.4 GBP \/kg\uff0cminimum 100 GBP<\/p>\r\n\r\n\r\n\r\n<p>FCL &#8211; Full Container Load: 90 GBP \/ton + 80 GBP\uff0cminimum GBP170\uff0cmaximum GBP500<\/p>\r\n\r\n\r\n\r\n<p>LCL- Less than Container Load: 550 GBP \/cargo<\/p>\r\n\r\n\r\n\r\n\r\n\r\n<p>Suppose that a batch of 100kg suits is sent from China to Amazon warehouse in the UK through Air freight, duty rate is 12%, the value of goods 1000 GBP, Transport cost 100 GBP. The UK VAT rate is known to be 20%.<\/p>\r\n\r\n\r\n\r\n<p>Duty=1000*12%=120GBP<\/p>\r\n\r\n\r\n\r\n<p>VAT=\uff081000+100+120+0.4*100\uff09*20%=252GBP<\/p>\r\n\r\n\r\n\r\n<p>Tax= DUTY+VAT=120+252=372GBP<\/p>\r\n\r\n\r\n\r\n<p>However, if you state that you didn\u2019t sell all VAT paid products on your quarterly reporting, you can ask for a taxrefund.<\/p>\r\n\r\n\r\n\r\n<p>The tax payable = sales VAT &#8211; import VAT<\/p>\r\n\r\n\r\n\r\n<p>NextSmartShip offer DDP shipping service<\/p>\r\n\r\n\r\n\r\n<p><a class=\"cta-btn\" style=\"margin: 0 auto 30px;\" href=\"https:\/\/www.nextsmartship.com\/get-custom-solutions\/\">Get Custom Solutions<\/a><\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>The UK withdrew from the EU on 31st January, and the transition period will run until 31st December 2020. There are only nine weeks to count down before that. The obligation for customs clearance of goods moving between the UK and the EU will start when the transition period is over. In this case, it [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":13499,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[19],"tags":[163,164],"class_list":["post-11894","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ecommerce-tips","tag-tax","tag-vat"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What You Must Know About EU DUTY &amp; VAT<\/title>\n<meta name=\"description\" content=\"After The UK left the European Union, it is better to know more about the specific calculation method of Duty and VAT in the EU.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.nextsmartship.com\/blog\/uk-duty-vat\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What You Must Know About UK DUTY &amp; 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