Import VAT in Germany: Calculation and Input Tax Deduction

A shipment reaches the bonded warehouse, duty has already been calculated, and yet the customs office demands a further payment before the goods are released. For many importers, this is the moment German import VAT first becomes tangible. It is not an exception or an added risk, but a fixed part of every import from a non-EU country, and one that can be calculated reliably.

In brief: Import VAT (Einfuhrumsatzsteuer, EUSt) is charged when goods are imported from a non-EU country and functions like Germany's regular VAT. It is calculated on the customs value plus duty, at the standard rate of 19 percent (7 percent reduced). Businesses can generally deduct EUSt as input tax. Since 1 July 2021, there is no longer a general exemption threshold for low-value shipments.

What is import VAT?

Import VAT is the tax levied on goods imported from a country outside the EU, so that imported goods are taxed on equal terms with goods produced in the EU. Without it, suppliers from non-EU countries could offer their products without a VAT burden and undercut domestic manufacturers on price. The abbreviation EUSt appears frequently in customs assessments and accounting records.

EUSt is levied directly at the border by German customs, regardless of whether the goods are imported by a business or a private individual. The standard rate is 19 percent; a reduced rate of 7 percent applies to certain categories of goods such as books or food. It is administered by the main customs offices through the electronic ATLAS customs system, usually together with duty on a single combined assessment notice.

Are duty and import VAT the same thing?

No, duty and import VAT are two separate charges that become due at the same time but serve different purposes. Duty is a trade levy whose amount depends on the type of goods and which also protects European manufacturers. Import VAT, by contrast, is a pure consumption tax levied regardless of the type of goods.

The key connection: both charges are based on the same determined customs value, but duty is calculated first and then flows into the assessment basis for EUSt. Get the customs value wrong, and the import VAT shifts automatically too, which is why both charges should always be considered together in practice.

How is import VAT calculated?

Import VAT is calculated on the customs value plus the duty already assessed, multiplied by the applicable tax rate. Which costs are included in the customs value also depends on the agreed Incoterm, for example whether freight and insurance are already included in the goods price or need to be added separately. A worked example makes this concrete:

EUSt is therefore not charged on the goods value alone, but on a basis already increased by freight, insurance and duty. Anyone calculating only with the goods value regularly underestimates the actual charge by several percentage points.

In our own sourcing projects from the Far East, we repeatedly see buyers forget import VAT in the first calculation for a new product, only to be caught off guard by the additional charge at customs clearance. That's why we factor EUSt into every pre-calculation as standard, before an order is ever placed.

Who has to pay import VAT, and when?

The party liable to pay is generally whoever is named as the declarant on the customs declaration, in practice usually the importer itself or its customs agent. EUSt becomes due together with duty during customs clearance and must be settled before the goods are released, unless a deferment account has been arranged.

For regular imports as part of importing from China, this means pre-financing with every single shipment if no further planning is done. The import regulations in force for 2026 offer no relief here, though the deferment account described below does. If the customs declaration is filed by a freight forwarder or customs agent under indirect representation, both the importer and the agent are jointly and severally liable for the import VAT, regardless of any private contractual arrangement between them.

How does input tax deduction work for import VAT?

Businesses can generally deduct the import VAT they've paid as input tax, provided the goods are imported for business purposes. The legal basis is Section 15 (1) No. 2 of the German VAT Act. As a result, EUSt is cash-flow neutral for most importers: it has to be paid upfront, but flows back through the next advance VAT return.

This requires proper documentation, usually the EUSt receipt from the customs office or an equivalent substitute document. If this documentation is missing or only assigned months later, the refund is delayed accordingly, and a tax that is supposedly neutral becomes a real cash-flow item. If importers also use a deferment account, the actual EUSt payment shifts even further out, while the input tax deduction still runs through the regular advance VAT return for the month of import, widening the cash-flow advantage even more.

When does import VAT not apply?

There has been no general exemption threshold for low-value shipments since 1 July 2021. Previously, shipments up to a goods value of €22 were exempt from EUSt; this rule was abolished EU-wide to remove competitive disadvantages for European retailers. Since then, EUSt generally applies from the very first cent of goods value.

One practical exception remains the de minimis rule under Section 15 of the German Import VAT Exemption Ordinance (EUStBV): if the calculated import VAT would be less than ten euros and would be fully deductible as input tax, German customs waives the assessment. In practice, this only affects shipments with a very low goods value and is barely relevant for most commercial imports.

In practice, we've observed that this change hit hardest for customers who used to deliberately declare small sample shipments from the Far East under the old €22 threshold. Since 2021, it pays to calculate even sample orders correctly from the outset, rather than counting on an exemption that no longer exists.

How does a deferment account work for import VAT?

With a deferment account at the responsible customs office, import VAT can be settled collectively on a fixed date rather than immediately with every single shipment. This particularly relieves importers with regular, smaller shipments, since it significantly reduces the administrative effort per import.

The application is filed with the relevant main customs office and generally requires a security deposit. For businesses with continuous goods flow from the Far East, this effort usually pays for itself quickly through the planning certainty gained.

The time gained differs for duty and import VAT: duty is due by the 16th of the following month, while under Article 110b of the Union Customs Code import VAT isn't due until the 26th of the second following month, a gain of up to roughly two months compared with paying immediately at import.

Checklist: planning for import VAT correctly

• Determine the full customs value, including freight and insurance costs to the EU border

• Check the applicable EUSt rate by goods category (19% standard, 7% reduced)

• Prepare for input tax deduction: systematically archive the EUSt receipt from customs

• Apply for a deferment account with the main customs office for regular imports

Frequently asked questions about import VAT

Are duty and import VAT the same thing? No. Both charges are levied together on import and are based on the same customs value, but they serve different purposes: duty is a trade levy that depends on the type of goods, while import VAT is a general consumption tax.

Who has to pay import VAT? The party liable to pay is the declarant on the customs declaration, in practice usually the importer itself or a commissioned customs agent, regardless of whether it's a business or a private individual.

How do I get import VAT back? Businesses can claim the EUSt they've paid as input tax through the regular advance VAT return, provided the goods are used for business purposes and proper documentation is available.

What is exempt from import VAT? Since July 2021, there is no longer a general exemption threshold. Only individual cases are exempt, such as certain returned goods or shipments where the calculated import VAT is less than ten euros and would be fully deductible as input tax.

Conclusion: import VAT as a plannable cost factor

Import VAT cannot be avoided, but it can be fully planned for. Anyone who determines the customs value correctly, consistently uses input tax deduction, and sets up a deferment account for regular imports turns EUSt into a calculable part of procurement costs rather than a surprise during customs clearance.

At Line Up, we factor import VAT into every shipment from the Far East as early as the quotation stage, and guide you through the entire customs process. 👉 Schedule a free consultation and let's work through your import costs together.