If you order online, you sometimes have to deal with import, customs and other additional costs. In this article we tell you what to look out for if you ever order products in China, the United States or the United Kingdom. If you are going to buy something from foreign webshops, pay attention to the following things.
A lot has changed in recent months when it comes to ordering products abroad. Of course we had Brexit at the beginning of this year. This has ensured that the United Kingdom is now outside the European Union (EU). The regulations for the payment of sales tax for cheap products have also changed on 1 July. In practice, this means that your order from AliExpress or any other store outside the EU may be more expensive than it was a year ago.
It is good to know which rules apply to which countries and what costs you may incur if you order something online outside the Netherlands. We’ll go into more detail here.
About VAT within and outside the EU
If you buy a product in the Netherlands, you always pay sales tax on it. This tax is popularly known as value added tax, VAT.
There are three VAT rates in the Netherlands: 21, 9 and 0 percent. You pay 21 percent VAT on the vast majority of products. The low 9 percent rate applies to foodstuffs, for example. The 0 percent rate applies in special cases and often only for companies that deal with imports and exports.
As a consumer you always pay the VAT on a product, prices in consumer web shops therefore always contain VAT. This applies to the entire EU, even if different VAT rates apply in other countries. If you order something in Germany, France or Spain, you simply pay the price, including the foreign VAT.
Products that you order from stores outside the European Union sometimes do not include VAT. A well-known example is the United States, prices are webshops always stated without US VAT, as this is regulated differently per state. If you order a product from a country outside the EU, the Dutch tax authorities will still charge VAT, in our case 21 percent.
This also applies to the United Kingdom since 1 January 2021, with the exception of Northern Ireland. If you order something from a British webshop, then you pay Dutch VAT on import. In many cases, the webshop will point this out to you and prices for EU customers will automatically be displayed without British VAT (vat).
So keep in mind that the final price for you as a customer is 21 percent more expensive. Until July 1, 2021 there was an exemption from VAT for packages under 22 euros, this has been canceled. You should therefore always take into account an additional VAT assessment if you order something outside the EU.
Import duties
In addition to VAT, you also pay import duties on some products that you import from outside the EU. This is not as much as VAT, often between zero and twelve percent. Exactly how much this is depends on the product. The EU has a book with hundreds of pages of so-called CN product codes (pdf) and percentages.
It is impossible to search for the correct code for the product you order yourself, but the webshop can often tell you which code they use for a certain product. You can then look up the rate using the CN code.
Import duties only apply to products that are worth more than 150 euros, this is the amount without the shipping costs. The VAT is also calculated on the amount plus the shipping costs and any insurance costs.
If the product exceeds 150 euros without shipping costs, the import duties are also calculated on the price with the shipping and insurance costs. So pay close attention! On the website of the tax authorities you can read all rules, including calculation examples.
How to pay
The VAT and import costs are already collected for you by large online stores, this is then specified when you pay. A well-known example is Amazon US or UK. If a webshop does not mention this, you pay the amount to the deliverer of the package. The Dutch tax authorities have agreements with all delivery services.
Suppose your package is delivered with UPS, then UPS will send you a message before delivery about how much VAT and import duties you have to pay. You settle this amount as soon as the package is delivered. The delivery person can also calculate customs clearance costs (also known as handling costs). This is often a fixed amount of about ten euros for the work that the delivery service has to transfer the collected money to the tax authorities.
Incidentally, it may well happen that your package escapes the attention of customs and it is therefore simply delivered by the delivery service without having to pay VAT, import duties and clearance costs. With some products you can choose to have it shipped from the EU, this is always smarter, because you don’t have to pay VAT and import duties.
Before you order something in a webshop, it is smart to verify whether the store is really located in the EU. There are Chinese online stores that do have a Dutch or English language website and that indicate prices in euros, but that are not located in the European Union. In such a case you simply pay import duties and VAT.
Some parts of an EU country are not part of the EU, well-known examples are the overseas territories of the Netherlands and France, the Canary Islands (Spain) and Büsingen and Helgoland in Germany. San Marino and Andorra are also not EU countries. Here you will find an overview.
Guarantee
If you buy something within the European Union, you are protected according to European regulations. This means that you have a standard two-year warranty on all products that you buy within the EU. These two years start from the moment of receipt, not from the moment you have ordered the product.
The seller is also responsible for the shipping costs. European regulations say that in the event of a defect within the warranty period, the consumer does not have to incur any costs. The seller can ask to examine the product first and see if it is indeed a warranty case. If so, you must first return the product yourself. In the event of a warranty case, you can then reclaim the shipping costs.
More information about this theme, including some examples, find you here.
The warranty conditions can be very different for products that you buy outside the EU. Before purchasing, check what arrangement the seller offers. In the case of products from China, for example via AliExpress, you usually cannot make use of a guarantee scheme.
Safe shopping
Also verify whether a webshop is reliable by googling it. If you find a lot of negative reviews, it might not be a good idea to order here. When paying, it is best to use your credit card or PayPal. This gives you purchase protection in some cases, although this is not a guarantee.
Finally, remember that products in the Netherlands and the EU must meet certain conditions, many product categories must have a CE mark.
Some products that you order in China do not have this quality mark. This can pose a danger to yourself, especially with charging cables and other electronic equipment. Toys can also contain too high levels of certain chemicals and be harmful to children. Cheap is simply expensive.
.