If you are importing goods into an EU country from a non-EU seaport, whether independently or through an IOR service, your goods will be classified as ‘imports’ and subjected to a fixed VAT rate. Understanding VAT rules and compliance can be challenging, especially without the assistance of experienced Importer of Record (IOR) services.
In this piece, we will discuss fundamental information that everyone needs to know about VAT rules when importing into any EU country.
Instance When VAT Goes to Zero
Yes, there is an instance where a shipper or Importer of Record (IOR) doesn’t have to pay anything in the name of VAT. This happens when shipping items are being transacted between two EU countries. Nonetheless, importers and IOR services need to meet certain conditions for that.
- Both parties (IOR services and consignee) involved in the transaction must contain a valid VAT number issued by an EU member.
However, this is not the only requirement. You must also take care of these things.
- The importer’s or IOR service’s foreign customer VAT must be verifiable through EU VIES system.
- You must have tangible proof that the goods movements have happened across the border. This proof is usually furnished by the Importer of Record (IOR) through goods transport documentation.
VAT Number Is Mandatory to Import Goods to EU Shores
There was a time when both IOR services and individual importers could operate without needing valid VAT numbers. However, it is now mandatory for every importing entity to possess a VAT number. Therefore, even if you are not seeking exemptions, having a VAT number is essential for EU customs to assess any tax liabilities.
Having a VAT Number in the Country of Import and Importer of Record (IOR)
Whether you need a VAT number in the country of import depends on the destination country for your goods. For example, an IOR service with a French VAT number may also need a German VAT number if it is distributing goods locally in Germany.
What is the IOR Tax?
The Importer of Record (IOR) tax refers to the duties, taxes, and fees that an importer is responsible for paying when bringing goods into a country. This includes customs duties, tariffs, and any other applicable charges levied by customs authorities.
If you find even basic information about VAT taxes complicated, consider contacting an experienced IOR Importer of Record service provider. They can handle shipping items on your behalf according to VAT rules and compliances. A seasoned Importer of Record can also assist you in securing maximum VAT refunds.
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