Impact on taxes & duties

with Incoterms

The choice of an Incoterm has an impact on the amount of import duties and taxes.

In fact, the Customs value, which serves as the basis of computation of customs duties, anti-dumping duties, anti-subsidies duties even retaliatory duties, includes the cost of transport and insurance of the goods up to the point of entry in the customs territory of the European Union (EU).

Moreover, the tax basis of the import VAT is itself calculated on the customs value to which the following elements are added:

  • customs duties, anti-dumping duties, anti-subsidy duties even retaliatory duties
  • fees after the introduction of the goods, until their first destination in the territory of the EU.

Depending on the Incoterm chosen, the value of transport, transport-related services and insurance must be added or deducted from the invoice amount to obtain the customs value and the base for calculating the import VAT.

It is important to verify the place of delivery that is specified for the Incoterm, and whether the contract between the purchaser and the seller specifies any adaptation of the Incoterm.

The following table summarizes, according to the Incoterm chosen, the fees to add or exclude from the value of the importer's purchase invoice, to determine the import customs value in the EU and the base for calculating the import VAT due:

Summary of fees to include by Incoterms

 

 

EXW

FCA

FAS

FOB

CPT

CFR

CIP

CIF

DAT

DAP

DDP

 

Seller's premises

Agreed port of embarkation

Agreed destination port

Purchaser's premises

To include in the customs value

Loading, pre-carriage

+

Included

Included

Included

Included

Included

Included

Included

Included

Included

Included

Customs export procedures

+

Included

Included

Included

Included

Included

Included

Included

Included

Included

Included

Transport, pre-carriage 

+

+

Included

Included

Included

Included

Included

Included

Included

Included

Included

Unloading, pre-carriage

+

+

Included

Included

Included

Included

Included

Included

Included

Included

Included

Loading, main transport

+

+

+

Included

Included

Included

Included

Included

Included

Included

Included

Main transport

+

+

+

+

Included

Included

Included

Included

Included

Included

Included

Transport insurance

+

+

+

+

+

+

Included

Included

Included

Included

Included

To exclude from the customs value

Unloading, at the point of arrival

VAT

VAT

VAT

VAT

VAT

VAT

VAT

VAT



VAT


VAT


VAT

Customs import procedures

VAT

VAT

VAT

VAT

VAT

VAT

VAT

VAT

VAT

VAT



VAT

Loading, post-carriage

VAT

VAT

VAT

VAT

VAT

VAT

VAT

VAT

VAT



VAT


VAT

Unloading, at destination

VAT

VAT

VAT

VAT

VAT

VAT

VAT

VAT

VAT



VAT


VAT

 

Legend

Included

Fees included in the importer's purchase invoice

+

Fees to add to the importer's purchase invoice to obtain the customs value

Fees to deduct from the importer's purchase invoice to obtain the customs value

VAT

Fees to include in the calculation base of the import VAT

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