Vat on Imports

rexel2

Hi all,

I have recently imported goods from Pakistan. The supplier sent the goods C&F by courier and the goods arrived a few days ago. I was under the impression I would have to pay the courier the vat before they would release the goods to me.

The goods were handed over and no mention of paying vat.

Can somebody please explain the normal procedure and if/how I am to pay vat on the goods.

I am starting a new business and want to do it by the book. Not interested in avoiding tax and getting found out at a later date.

Note I am not vat registered

Thanks in advance

RUDOLF289

Hello Rexel2

First of, if you are setting up a business and if you import (either from within or outside the EU) I would recommend you register for VAT. Even if you stay below the threshold. The reason is, VAT paid on imports from outside the EU is a deductible input for VAT registered traders (i.e. you can claim it back through your VAT return) Obviously, once you register for VAT you also have to charge VAT to your clients and remit the VAT you collect on your sales (less your deductible inputs) to the Revenue.

You obviously brought in a small enough quantity and depending on the value that was declared, it might have stayed below the values that would trigger a requirement to file a customs entry. If the quantities/values increase, you are likely to have to pay Duty and VAT.

Duty is calculated over the cost of the product, marine/transport insurance and freight cost (i.e. the C I F landed price) . VAT is the charged over the CIF landed price plus the duty.

Note, for goods coming from Pakistan your supplier should be able to furnish a GSP form A. In most cases that would reduce the percentage of duty, depending on the commodity it might actually reduce to zero.

Have a look at the attached document. It may answer some of your questions. Feel free to drop me a line if I can help you with anything else in the area of transport, customs etc

Best of luck with your new business

Cheers,
Rudolf289