Import VAT Explained: Registration, Fiscal Representation, Deferment and Reclaim

Import value-added tax (VAT) isn’t one decision. It’s five, made in sequence: whether you need to register, who stands behind the VAT, how much is owed, whether you pay it at the border and how you get it back.

Most costly VAT mistakes come from answering one of those questions by assumption. A shipment clears smoothly, so the VAT position must be fine. A business is small, so registration can’t apply. Each assumption sounds reasonable, and each can leave VAT unrecoverable. Here’s what to know at each step.

1. Do You Need to Register for VAT?

Most shippers treat this as a numbers game: cross a turnover threshold and you register; stay below it and you don’t. In practice, where your business is established and what it does in the country matter far more than volume.

Thresholds aren’t one number per country. A locally established business may qualify for a national exemption threshold, which cannot exceed €85,000 under EU rules. A business established elsewhere in the EU may be able to opt into an exemption. A non-EU business typically gets no threshold at all and must register from its first taxable supply, whether that’s one parcel or a container.

Activity matters too. Holding stock locally or acting as importer of record can trigger registration regardless of size. And routes that once avoided registration can disappear: since January 1, 2026, France no longer allows non-EU sellers to import under a broker’s VAT number through “one-off” fiscal representation.

The better question isn’t “Are we shipping enough to worry?” It’s “What is our status here, and is the route we rely on still available?”

2. Who Is Responsible for Your VAT?

Without a local establishment, someone local usually has to take responsibility for your VAT. That party is a fiscal representative.

The common mistake is assuming that if a broker can declare your goods on your behalf through indirect customs representation, you’re covered. Customs law decides who can declare the goods, while tax law decides who’s responsible for the VAT. The two don’t always agree.

In some markets, such as Germany, Italy and Spain, indirect representation isn’t permitted at all, so a fiscal representative is the only way in. In others, including France, Belgium and Switzerland, indirect representation is allowed, but a fiscal representative is still required in addition.

The second group is where the risk sits. The goods clear without a problem, so nobody looks further. The gap only surfaces later, in an audit or a VAT reconciliation, when it’s far more expensive to fix.

3. How Is Import VAT Calculated?

Import VAT is calculated on the landed cost of the goods, with duty calculated first. The VAT calculation then includes the duty and other applicable costs.

Take €10,000 of goods imported into the EU at a 4% duty rate:

The inland transport line is the one people miss: EU rules include costs up to the first destination in the VAT base, even though no duty was charged on those costs. What counts toward the base, and the VAT rate itself, vary by country and product.

4. Do You Have to Pay Import VAT Upfront?

Not always. Paying VAT at the border and waiting to reclaim it ties up cash. Import VAT accounting schemes can let you account for it on your VAT return instead.

The UK and the Netherlands both offer this, but the requirements are very different. In the UK, postponed VAT accounting requires UK VAT registration, with no separate application for approval. You also need an Economic Operators Registration and Identification (EORI) number, which identifies your business for customs purposes. A GB EORI is an EORI number issued by the UK, with “GB” standing for Great Britain. One catch: a GB EORI issued before VAT registration cannot simply be linked to that registration later. A business that subsequently registers for VAT needs a replacement EORI that reflects its VAT number.

The Netherlands’ Article 23 license is a bigger undertaking, with conditions to meet, a financial guarantee to post and discretionary approval. The payoff is larger too: it opens a route into the entire EU, not just one country.

Either way, being entitled to use a scheme is not the same as having it applied. Confirm whether it was actually applied to every shipment.

5. How Do You Reclaim Import VAT?

Which reclaim route you use depends on where you’re established and registered. Choosing the wrong one, or missing its deadline, can mean the claim is refused for good.

The 13th Directive is where most claims fail. Deadlines are earlier and vary by country; Germany’s and Austria’s leave essentially no room for a late filing. Some countries refuse claims from businesses in certain countries on reciprocity grounds, which affects U.S. businesses in particular. And if your activity requires local registration, that refund route closes entirely.

A refused claim doesn’t always mean the VAT is lost. But the options narrow quickly once a deadline passes.

The Takeaway: Establishment Status Matters

One fact runs through all five questions: your establishment status. It decides whether a threshold applies, whether you need a fiscal representative, how you qualify for deferment and which reclaim route is open to you.

The shortcuts that let businesses skip local compliance are closing market by market, as France showed this year. If you’re entering a new market, or aren’t sure whether your current setup still holds, it’s worth having the full picture checked before it’s tested in a customs audit.

Get Help with International VAT and Import Requirements

GLOBAL GATEWAY by Shipping Solutions helps U.S. exporters navigate international shipments, including customs and VAT compliance. Whether you need support with a specific requirement or help coordinating the full process, talk with our Global Gateway team about your next shipment.

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