How EU Businesses Can Apply for VAT Rebates When Importing from Overseas: A Complete Guide

CNXtrans
Jul 8
5 min read

Importing goods from non-EU countries like China, the USA, or other global suppliers is a normal part of doing business for many European companies. However, a crucial aspect that importers often overlook is properly reclaiming the import VAT they pay at the border.

This guide will explain:

✅ How import VAT works for EU businesses

✅ Who is eligible to reclaim it

✅ The step-by-step process to reclaim import VAT

✅ What documentation you need

✅ Common pitfalls to avoid

✅ Special tips for businesses working with customs brokers or shipping on different Incoterms

📌 What Is Import VAT and Who Pays It?

When goods enter the EU, customs authorities apply import duties (if applicable) and VAT at the rate of the destination country.

This import VAT must be paid upfront before goods are released from customs.

The VAT is calculated based on the customs value of the goods plus any duties, shipping costs, and insurance up to the point of entry.
The importer of record is responsible for paying this VAT.

For VAT-registered EU businesses, import VAT is not usually a final cost — it can be reclaimed as input VAT on the company’s VAT return.

✅ Example:

A German company imports machinery worth €50,000 from China. Germany’s import VAT rate is 19%. They pay €9,500 in import VAT to customs. This €9,500 can be deducted as input tax in their next VAT return.

✅ Who Can Reclaim Import VAT?

To reclaim import VAT, your business must meet these basic conditions:

You are VAT-registered in the EU country where the goods are imported.
You are listed as the importer of record on the customs declaration (the SAD — Single Administrative Document).
The goods are used for your taxable business activities.
You have valid supporting documentation, such as the customs declaration and proof of VAT payment.

💡 Important: If you do not appear as the importer of record — for example, if you import on a DDP basis and your freight forwarder clears the goods under their name — you cannot reclaim the VAT.

📋 Required Documents for Reclaiming Import VAT

Each EU country may have slightly different documentary requirements, but in general, you will need:

✔️ Import Entry Document (SAD) — this shows your company as the importer and the amount of VAT paid.

✔️ Proof of Payment — evidence that your company paid the VAT (e.g., a bank statement or payment receipt).

✔️ Commercial Invoice — showing the value of the goods, shipping, and insurance.

✔️ Freight Documents — such as the Bill of Lading or Airway Bill.

✔️ VAT Return — where the import VAT is declared as input tax.

Always keep these documents for the period required by your national tax authority (commonly 5-10 years).

🔑 How to Reclaim Import VAT: Step-by-Step

Here’s the general process for reclaiming import VAT in the EU:

1️⃣ Make Sure You’re the Importer of Record

Use Incoterms like DAP (Delivered At Place) or DDU (Delivered Duty Unpaid).
Work with a reliable customs broker to ensure your company’s EORI number is used on the import declaration.

2️⃣ Pay Import Duties and VAT

Your customs broker will calculate the correct amount of VAT based on the customs value, duties, and transport costs.
Pay the VAT to customs before the goods are released.

3️⃣ Declare the Import VAT on Your VAT Return

Most EU businesses use the ‘reverse charge mechanism’ for imports.
You declare the import VAT you paid as both output tax and input tax in your VAT return — which cancels out the payment, provided the goods are for taxable business use.

4️⃣ Keep Complete Records

Save copies of the import entry, invoices, freight documents, and customs agent invoices.
Ensure the customs declaration clearly shows your company’s VAT number and EORI number.

5️⃣ Submit Your VAT Return On Time

Include the import VAT amount in the correct boxes on your VAT return.
Many EU countries have online VAT filing systems — always check local rules.

🧾 Special Considerations for Different EU Countries

Each EU member state applies the general principle but may have local specifics:

Germany: Import VAT (Einfuhrumsatzsteuer) is declared in box 62 of the VAT return.
Netherlands: Many businesses use the Article 23 permit, which allows them to defer payment of import VAT to their VAT return instead of paying upfront.
France: The ‘auto-liquidation’ system means you self-assess the import VAT on your VAT return.
UK (if shipping there): Since Brexit, import VAT applies to goods from the EU and non-EU. The postponed VAT accounting system allows businesses to account for VAT on their return.

Always check your national tax authority’s website for the exact rules.

⚠️ Common Mistakes to Avoid

❌ Shipping DDP Without Understanding VAT Implications:As explained above, if you use Delivered Duty Paid (DDP) and your supplier or their broker clears customs under their name, you won’t be able to reclaim the VAT.

❌ Incorrect Customs Values:Under-declaring the value to reduce duties can lead to penalties and VAT reclaim issues if the declared value does not match your purchase invoice.

❌ Missing EORI Number:Without an EORI number, you cannot be listed as the importer of record.

❌ Inadequate Record-Keeping:Losing customs documents means losing proof you paid import VAT. Always keep digital and paper copies.

🔍 Can Non-EU Companies Claim EU VAT Back?

In some cases, non-EU businesses can claim back VAT paid in the EU if they meet certain criteria, usually via the 13th Directive Refund Scheme. However, this is separate from reclaiming import VAT and applies more to business travel or local purchases — not goods brought in for resale.

✅ Practical Tips for Smooth VAT Reclaims

✔️ Work with a reputable customs broker who understands your VAT position.

✔️ Use clear Incoterms that match your tax objectives.

✔️ Check customs declarations immediately — errors can often be corrected quickly if spotted early.

✔️ Consult your accountant or tax advisor if you’re unsure about VAT treatment for complex imports.

📢 Final Takeaway

Import VAT doesn’t have to be a final cost — if you structure your shipments correctly, appear as the importer of record, and maintain proper documentation, you can fully reclaim this tax and protect your cash flow.

It’s worth taking the time to get your customs and VAT processes right from the start.By doing so, you stay compliant with EU tax law, avoid costly mistakes, and keep your international supply chain as cost-efficient as possible.

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