How-To Guides
How to Calculate EU Import Duty and VAT (CIF Formula)
Published · 8 min read
EU import duty is the customs value of the goods — the price paid plus freight and insurance up to the EU border (a CIF-type value) — multiplied by the duty rate for your 10-digit TARIC code and country of origin. Import VAT is then charged on the customs value plus that duty plus transport to the first destination in the member state, at that country's VAT rate (for example 19% in Germany or 21% in the Netherlands).
Two things make EU landed cost different from US landed cost. The duty base includes international freight, and import VAT is due at the border on top of duty — recoverable for VAT-registered businesses, but a real cash-flow cost. This guide walks through the formula, where to find each input, and a complete worked example.
How Is EU Import Duty Calculated?
EU import duty = customs value × duty rate. Getting both inputs right takes four steps:
- Classify the goods. Find the 8-digit Combined Nomenclature (CN) code and the 10-digit TARIC code. Our HS code guide covers how classification works.
- Look up the rate in TARIC. In the TARIC database, enter the code and the country of origin. You will see the third-country (MFN) duty, any preferential rate under an EU trade agreement or GSP, and any anti-dumping or countervailing measure for that origin.
- Work out the customs value. Start from the transaction value (the price actually paid) and add transport and insurance costs up to the place where the goods enter the EU customs territory, as set out in the Union Customs Code.
- Multiply. Customs value × duty rate = duty payable. Add any anti-dumping duty on the same base.
The rate you use depends on origin, not on where the goods shipped from. A preferential rate only applies if you hold valid proof of origin, such as a statement on origin under an EU free trade agreement.
What Goes Into the EU Customs Value?
| Include in customs value | Leave out (if shown separately) |
|---|---|
| Price paid or payable for the goods | Transport and insurance after the goods enter the EU |
| Freight and insurance to the EU border | Import duty and import VAT themselves |
| Loading and handling up to the border | Buying commissions |
| Packing costs and containers | Interest under a financing arrangement |
| Royalties and licence fees that are a condition of sale | Costs of construction or assembly after import |
| Assists (tools, moulds, designs supplied free to the producer) |
The big difference from the US: US duty is normally charged on the transaction value excluding international freight, while the EU charges duty on a value that includes it. The same shipment therefore pays duty on a larger base in the EU. The Incoterm on your quote changes who pays the freight, not whether it is in the EU duty base.
How Is EU Import VAT Calculated?
EU import VAT = (customs value + import duty + incidental costs to the first destination) × national VAT rate, under Articles 85 and 86 of the EU VAT Directive. Incidental costs include transport and insurance from the border to the first place of destination in the importing country, when that destination is known at import.
Standard VAT rates in major EU import markets:
| Member state | Standard VAT rate |
|---|---|
| Germany | 19% |
| France | 20% |
| Netherlands | 21% |
| Belgium | 21% |
| Spain | 21% |
| Italy | 22% |
| Poland | 23% |
| Ireland | 23% |
VAT-registered businesses normally recover import VAT through their VAT return, and several countries let you account for it on the return instead of paying at the border (postponed or reverse-charge import VAT). That turns VAT from a cash outlay into a book entry, which matters when you are importing at volume.
Worked Example: Importing From China Into Germany
An importer in Germany buys 2,000 units at €5.00 FOB Shanghai. All figures are illustrative; the duty rate is an example — use the TARIC rate for your own code.
| Line | Amount |
|---|---|
| Goods (2,000 × €5.00 FOB) | €10,000.00 |
| Ocean freight to Rotterdam | €1,100.00 |
| Cargo insurance | €40.00 |
| Customs value (CIF Rotterdam) | €11,140.00 |
| Import duty at 4% | €445.60 |
| Transport Rotterdam → German warehouse | €350.00 |
| VAT base (11,140 + 445.60 + 350) | €11,935.60 |
| German import VAT at 19% | €2,267.76 |
| Customs broker fee | €150.00 |
Landed cost (excluding recoverable VAT) = €10,000 + €1,100 + €40 + €445.60 + €350 + €150 = €12,085.60, or €6.04 per unit — 21% above the €5.00 FOB price. The €2,267.76 of VAT has to be funded at import (or postponed) and is reclaimed later.
How Do Trade Agreements and Trade Defence Change the Rate?
- EU free trade agreements (for example with Vietnam, Japan, Canada, Korea or Morocco) can cut the duty to zero for goods that meet the agreement's rules of origin.
- GSP and EBA reduce or remove duty for eligible developing and least-developed countries; EBA gives duty-free, quota-free access for everything except arms.
- Anti-dumping and countervailing duties can add large, exporter-specific duties on top — TARIC shows them as additional codes for the origin and product.
- Turkey is in a customs union with the EU for most industrial goods, so qualifying goods in free circulation move without customs duty.
Because each of these depends on origin, the cheapest supplier country for the EU is often different from the cheapest for the US. That is exactly what a supplier-country comparison for EU imports is for.
What Changed for EU Importers in 2026?
- CBAM entered its definitive period on 1 January 2026. Importers of iron and steel, aluminium, cement, fertilisers, hydrogen and electricity above 50 tonnes a year need authorised CBAM declarant status — see our CBAM 2026 guide.
- The €150 customs duty exemption ended on 1 July 2026. Low-value consignments now pay a flat €3 customs duty per item category — see our guide to the €3 parcel duty.
Checklist Before You Import Into the EU
- EORI number in place for the declarant.
- 10-digit TARIC code confirmed (consider a Binding Tariff Information decision for high-volume lines).
- Rate checked in TARIC for your origin, including anti-dumping measures.
- Proof of preferential origin collected if you claim an FTA or GSP rate.
- Customs value built on a CIF basis, with post-border costs invoiced separately.
- Import VAT cash flow planned — postponed accounting where available.
- CBAM exposure checked for any steel, aluminium, cement or fertiliser inputs.
ImportCostPro's EU analysis ranks 20+ supplier countries by landed cost to your EU port, applying TARIC duty, GSP/EBA and FTA preferences automatically. For terms used here, see the import glossary.