Import from China: Key information on taxes
Do you import products from China to Spain or are you thinking of doing it? This involves several taxes that you must take into account before placing any order, as the expense increases and your idea may not be profitable. In particular, the rates of custom duties of the European Union, the VAT of the import and the fees and other expenses of the custom agents + the corresponding VAT come into play. We are going to put everything in order so you can see it easier.
If you are still unclear about what is considered an import, who is the taxpayer or its exemptions, we recommend that you read our article about the VAT of imports in Spain.
- VAT on imports from China
- Import tariffs from China
- Customs costs when importing from China
- From what amount are taxes paid?
- How are taxes paid when import from China?
- Other things you should know about importing from China
VAT on imports from China
Import VAT is the tax that must be paid by the importer in extra-community acquisitions. For the most part, the tax is 21%, although there are also reduced rated of 10% or 4%.
On the one hand, VAT is charged on the value of merchandise in customs (to which customs duties are previously added) and, on the other hand, it is charged on the fees and other expenses of custom agents.
Import tariffs from China
First of all you must know that the European Union is a single market, so that all its member states have the same rates of custom duties when importing from outside the EU. If imported from another EU country, they are considered intra-community acquisition.
What does make custom tariffs vary are the types of products. The European Union tries to protect its industries, so that it applies a higher rate to the type of article that is considered already produced in enough quantity in the EU. For example, shoes have a rate of 12%, electric bicycles 6% and solar panels 0%. There are also additional tariffs for certain products, such as tobacco and alcohol.
Customs costs when importing from China
At the customs value, the following costs must be included to be paid separately, if necessary:
- Commission and fees to sales agents
- Transportation costs generated in the importer’s country
- Costs generated in the port of destination
Customs authorities do not make estimates, so the declared value will be detailed in the Bill of Landing, a document issued by your supplier or carrier.
From what amount are taxes paid?
VAT is paid if the import is higher than 22 Euros for shipments sent by a company and 45 Euros for shipments between individuals.
A tariff is charged from transactions with a value greater than 150€. If the value of the import is lower, it is exempt.
How are taxes paid when import from China?
There are several ways to pay taxes when importing from China. The most common are the following three:
- Pay the shipping company: It is the simplest option. When the merchandise arrives at the port and the customs authorities add the taxes, they are billed for their parcels. In other any cases you can ask to be paid before shipping.
- Apply a customs credit: The customs authorities offer credits to importers that allow from them to receive the goods first and pay the taxes later. It is paid to a bank account of the authorities instead of to the transport company.
- Taxes are included in the price paid to the supplier: Purchases called DDP include customs taxes in addition to shipping costs and customs agent. Even so, taxes such as VAT are usually not included and must be paid when they arrive at the port.
Other things you should know about importing from China
We ended up solving a series of quick questions that may have arisen or will arise when investigating more about how to import from China. For any other doubt, we encourage you to contact us. We will make sure that your imports comply with all legal parameters and, even, we advise you to know if they turn out to be profitable after taxes.
Do I have to pay taxes in China?
No. Any cost generated in China should be included in the FOB price.
Can you pay taxes voluntarily if they have not been paid at customs?
On some occasions, any import that exceeds 22 Euros is not stopped at customs and you are not charged the corresponding taxes. It would not be an irregularity and you would not have to pay for them, although you will have to add VAT on your sales invoice and in your quarterly statement you will have more VAT to pay to the Tax Agency.
If you want to pay the tariffs voluntarily, you must search for a customs agent for this procedure.
What are Anti-Dumping taxes?
The Chinese government allows certain local manufacturers to sell their products for a lower price than the market or even the cost price, a practice called Dumping. In the European Union this is a prohibited practice and, to regulate it, Anti-Dumping taxes are used by some specific industries or manufacturers, which normally reach between 40% and 60%. Before importing from China, inform yourself very well.