Imports are often considered the backbone of international trade and a vital component of the global economy. In this article, we explain what imports are, explore the rules governing them, and discuss how these regulations vary depending on the country of origin.
What does import mean?
So, what exactly is meant by 'import'? Simply put, 'import' means bringing goods or services from another country.
What is import?
What does importing specifically involve? The concept of imports is relevant in both microeconomic and macroeconomic contexts.
In microeconomics, imports refer to the purchase of goods by companies from foreign markets. In macroeconomics, the term describes the total volume of goods and services that enter a country from abroad.
What does importing mean?
Importing is the process that involves buying and transporting goods across borders for use, sale, or distribution in the local market.
Excise duties on imports
Excise taxes are a collection of special taxes, also known as indirect taxes, which are levied on specific goods such as tobacco, nicotine, alcoholic beverages, and gambling. In addition, it includes environmental and energy taxes on electricity and oil. These excise duties must be paid when the goods are imported into the EU.
The responsibility for paying excise duties lies either with the company acting as an approved warehouse keeper, the person responsible for security, or the person importing the goods. It is important to note that excise duty must be paid before the goods are consumed. Therefore, it is not always the manufacturer who is responsible for the payment, but it can also be the company that stores the goods, the one that issues the security, or the one that imports them.
VAT on imports
Anyone who buys goods from abroad must report VAT. To report VAT, you calculate 6%, 12%, or 25% VAT on the value of the purchase and book it as sales VAT.
Whoever imports goods also needs to take into account customs duties. To calculate this amount, the value of the goods is used, which includes the total cost of getting the goods to the EU's external border. This includes the price of the goods, shipping costs, and insurance.
When importing, the origin must also be stated in the import declaration. This means that you must specify where the goods were manufactured. This is an important aspect of the import process and is used to determine any customs benefits or regulations that may apply to the goods.
Are you wondering how to calculate shipping costs for imports? Learn more in our guide on shipping costs and how to calculate them effectively.
Customs rules
Customs rules are regulations that govern imports and exports of certain goods. These rules may vary depending on various factors such as trade policy, environmental protection, health, and safety. Special restrictions may be imposed to ensure compliance with these aspects.
Examples of goods with special customs rules include:
- Agricultural products
- Food
- Cultural objects
- Chemical products
- Radioactive waste
- Animal products and live animals
- Endangered animals and plants
- Drug
In addition, goods containing ozone-depleting substances, such as spent refrigerants in refrigerators, freezers, or air conditioners, are subject to specific customs rules. For further information about the rules regarding these goods, you can contact the World Customs Organization.
It is important to be aware of and follow customs regulations to avoid problems with the import and export of the above-mentioned goods.
Curious about the details of exports? Check out our article: What are exports?
Different rules for imports depending on the country and continent
Import within the EU
Within the EU, there is no formal import or export of goods; instead, the term 'delivery of goods' is used. However, 'import' is still commonly used in everyday language and practice. Additionally, within the EU, customs duties do not apply to goods from other member states; instead, VAT and any applicable excise duties are charged.
Imports outside the EU
To import goods from countries outside the EU into the EU, your company must be registered as an importer with the authorities. Upon registration, you are assigned one EORI number (Economic Operators Registration and Identification), which is then entered into a common EU register of companies that import and export to and from countries outside the EU. The EORI number is essential to facilitate and monitor trading activities.
Importing from the United Kingdom
When purchasing goods from the UK, there are several important steps to follow to facilitate the customs process. Initially, you must register as an importer with your national customs authority. This registration is essential to manage the import process effectively.
You also need to decide how to handle the payment of customs duties levied on the imported goods. Once approved as an importer, you will be assigned an EORI number, which simplifies the customs procedures and ensures you are correctly identified by both the UK and your local customs authorities.
Following the UK's exit from the EU and the subsequent trade agreement, companies within the EU can benefit from reduced customs duties when importing from the UK. Similarly, British companies benefit from reduced customs fees when importing from EU countries.
Importing from the United States
Since the United States is outside the EU, customs clearance is required for all imported goods from there into the EU. This means that customs duties must be paid on goods imported from the United States, regardless of whether they concern businesses or individuals.
When importing from the US, it is important to enter import VAT on the goods in your VAT return. This is a necessary measure to ensure correct reporting and compliance with customs regulations and tax requirements. Being aware of and following these procedures facilitates a smooth import process from the US to the EU.
Importing from China
When importing goods from China into the EU, you always need to carefully consider the total product costs, also known as the bottom line. These costs include not only the price of the product but also transport costs, insurance costs, and any customs duties, VAT, and other charges that may arise during the import process.
Two of the most common trade terms for imports from China are “Free on Board” (FOB) and “Ex-Works” (EXW):
- FOB (Free on Board): The costs for transporting the goods to the ship are included. When the goods leave the Chinese port, responsibility for costs and risks passes to the buyer.
- EXW (Ex-Works): The buyer is responsible for all costs and risks from the time the goods are handed over by the seller at the factory in China. It is up to the buyer to organize and pay for shipping, insurance, and other costs.
Do you want to learn more about Incoterms? Read our article: Incoterms: Everything you need to know about Incoterms 2020
Bertling offers shipping options for imports
Bertling specializes in logistics and freight transport. We offer customized global transport solutions and a high degree of flexibility in our configurations. To work proactively and to meet new conditions when they arise is our vision. Regardless of whether you are importing goods from a country within or outside the EU, we can offer the best transport option for your cargo.
Explore our freight options including sea freight, air freight, road freight, and rail freight.
