Import VAT is crucial for businesses importing goods into the UK and EU, ensuring fair trade and consistency across borders. In the EU, import VAT is levied on goods from outside the union to maintain competitiveness and generate revenue. In the UK, post-Brexit changes include schemes like postponed VAT accounting, allowing businesses to defer VAT payment. Import VAT is calculated based on the customs value of goods, including purchase price, transport, insurance, and any duties. Businesses can reclaim import VAT if properly documented. Compliance with import VAT is essential for businesses, impacting cash flow and pricing strategies. Special considerations include the EU’s IOSS and the UK’s VAT on ecommerce goods. Compliance requires accurate classification of goods, thorough documentation, and expert consultation.
Source VATit
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