China VAT: A Guide

When you import products from China for sale on bol.com or through your own webshop, you inevitably have to deal with btw china regulations. The import VAT, customs duties, and Incoterms together determine how much you actually pay for your products - and thus your profit margin. In this comprehensive guide, we explain step by step how VAT works when importing from China, which exemptions exist, and how you can avoid common mistakes.

What is import VAT when importing from China?

When you import goods from a country outside the European Union - such as China - you have to pay import VAT in the Netherlands. This is similar to the VAT you pay for domestic purchases, but is levied when the goods enter the EU. The standard rate in the Netherlands is 21%, while a reduced rate of 9% applies to certain product categories (such as food and books).

The import VAT is calculated on the customs value of your shipment, plus the import duties. The customs value includes the purchase price of the goods plus the transport and insurance costs up to the EU border. As an entrepreneur with a VAT number, you can then deduct the paid import VAT as input tax in your VAT return - it's not an extra cost, but a liquidity effect.

Calculating VAT for China: step-by-step example

To understand how btw china works in practice, let's go through a concrete example. Suppose you import a batch of phone cases from Shenzhen for sale on bol.com:

Cost item	Amount	Explanation
Purchase price of goods	€5.000	FOB price agreed with supplier
Transport costs (sea freight)	€800	To the port of Rotterdam
Insurance costs	€150	Transport insurance
Customs value	€5.950	Purchase price + transport + insurance
Import duties (6.5%)	€386,75	Dependent on TARIC code
Basis for import VAT	€6.336,75	Customs value + import duties
Import VAT (21%)	€1.330,72	To be settled via VAT return
Total upon import	€7.667,47	Total costs including VAT

In this example, you pay €1.330,72 in import VAT. As a VAT entrepreneur, you deduct this amount in your next VAT return. Your actual extra costs are the import duties of €386,75. Use the Boloo Profit Calculator to calculate your actual profit margin per product, including all import costs.

Import duties: rates and TARIC codes

In addition to VAT, you also pay import duties when importing from China. The amount depends on two factors: the TARIC code (the classification number of your product) and the country of origin. China is not an EU contract partner with a preferential tariff, so you pay the standard rate.

Common TARIC rates for China imports

Product category	Example TARIC code	Import duty
Phone accessories	3926 90 97	6.5%
Clothing (textile)	6204 62 31	12.0%
Electronic devices	8471 30 00	0.0%
Toys	9503 00 70	4.7%
Kitchen utensils (plastic)	3924 10 00	6.5%
Bags and suitcases	4202 92 98	3.7%
Bicycle accessories	8714 99 90	4.7%
Cosmetics	3304 99 00	0.0%

You're exempt from import duties if the value of your shipment from a non-EU country is €150 or less (excluding shipping and insurance costs). Note: this exemption doesn't apply to alcoholic products, perfumes, and tobacco products. For most bol.com sellers who import larger quantities, this threshold isn't relevant.

Anti-dumping duties

Certain product categories from China are subject to additional anti-dumping duties. The EU imposes these duties when Chinese manufacturers export products below cost price. Well-known examples include solar panels, bicycles, ceramic tiles, and certain steel products. These duties can add up to 70% on top of regular import duties. Always check the EU TARIC database to see if your product is subject to an anti-dumping measure.

Incoterms: who pays the Chinese VAT?

The Incoterms (International Commercial Terms) determine who's responsible for transportation, insurance, import duties, and VAT. This directly affects how you handle Chinese VAT. The International Chamber of Commerce (ICC) reviews the Incoterms every ten years - the current version is Incoterms 2020.

Most commonly used Incoterms for imports from China

Incoterm	Transport	Insurance	Import duties & VAT	Suitable for
EXW (Ex Works)	Buyer	Buyer	Buyer	Experienced importers
FOB (Free on Board)	Buyer (from port)	Buyer	Buyer	Most popular for China imports
CIF (Cost, Insurance, Freight)	Seller	Seller	Buyer	Beginners
DDP (Delivered Duty Paid)	Seller	Seller	Seller	Maximum convenience
DAP (Delivered at Place)	Seller	Seller	Buyer	Middle ground

FOB (Free on Board) is the most commonly used Incoterm for imports from China. The supplier arranges transportation to the Chinese port and handles export formalities. As the importer, you're responsible for sea freight, insurance, import duties, and VAT from that point on. This gives you the most control over logistics costs.

With DDP (Delivered Duty Paid), the seller handles everything, including import duties and VAT. This sounds appealing, but be aware: the seller factors these costs into the price, often with a markup. Additionally, you'll have less control over customs clearance and might not be able to reclaim the VAT.

What Incoterms don't cover

Despite their comprehensive coverage, Incoterms don't regulate several aspects: they don't determine the sales price, identify the goods specifically, refer to payment terms, or regulate the transfer of ownership. You'll need to agree on these points in your purchase contract with the Chinese supplier.

VAT deferment scheme (Article 23)

As a Dutch entrepreneur, you can take advantage of the verleggingsregeling (Article 23 of the Tax Act). This allows you to defer paying import VAT at customs and instead report it in your regular VAT return. This saves you a significant amount of liquidity pressure - you don't have to pre-finance the VAT amount.

To use Article 23, you need a permit from the Tax Authority. The application is free and is usually processed within eight weeks. For many bol.com sellers who regularly import from China, this is an essential arrangement. You report the import VAT in box 4b of your VAT return and simultaneously deduct it in box 5b - so you don't pay anything extra.

VAT rules in Belgium for imports from China

Belgian entrepreneurs also pay 21% import VAT when importing from China. The calculation is similar: VAT on the customs value plus import duties. Belgium also has reduced rates of 6% and 12% for specific product categories.

In Belgium, there is the ET 14,000 permit as the equivalent of the Dutch Article 23 permit. This allows you to defer the import VAT to your periodic VAT return. The application is made through the local VAT office. Belgian e-commerce entrepreneurs who sell through bol.com Belgium benefit directly from this, as their cash flow is not burdened with pre-paid VAT.

Common mistakes when dealing with VAT and China

Many starting importers make costly mistakes when handling VAT and import duties. Avoid these pitfalls:

1. Using the wrong TARIC code

Incorrect classification can lead to too much or too little import duty. If Customs checks, you risk additional taxes and fines. If in doubt, have your product classified by a customs agent.

2. Not applying for an Article 23 permit

Without the deferral arrangement, you pay the full import VAT in advance at customs. For large shipments, this can be thousands of euros that you only get back weeks later through your VAT return. Apply for the permit before your first import.

3. Not including transport costs in the customs value

The customs value includes not only the product price but also transportation and insurance costs up to the EU border. If you forget to include these, you'll report a customs value that's too low - resulting in additional taxes.

4. Choosing DDP without VAT verification

With DDP deliveries, the Chinese seller handles the import. Some suppliers use gray constructs to avoid import duties. As the importer, you're ultimately responsible. Preferably choose FOB and handle the import yourself.

5. Not taking into account anti-dumping duties

Always check if your product category is subject to an anti-dumping measure. These duties can drastically increase your cost price and undermine your entire business case.

Practical tips for bol.com sellers

If you import products from China for sale on bol.com, there are several practical steps you can take to optimize your VAT and import process:

• Use the Boloo Winstcalculator to include all import costs (customs duties, VAT, transport) in your margin calculation
• Apply for an article 23 permit with the Tax Authority to protect your cash flow
• Work with a reliable customs agent who has experience with Chinese imports
• Keep track of your administration with all import documents, invoices, and VAT returns
• Check your product prices with the Boloo Product Tracker to see if you're competitively priced, including all import costs
• Calculate your selling price in advance, including all costs, with the Boloo Product Database for market insights

Frequently asked questions about VAT China

How much VAT do I pay when importing from China?

In the Netherlands, you pay 21% import VAT on the customs value plus customs duties. For certain products (food, books), a reduced rate of 9% applies. As a VAT entrepreneur, you can deduct the import VAT in your VAT return.

Can I get a VAT refund when importing from China?

Yes, if you have a VAT number and import goods for business purposes, you can deduct the paid import VAT as input tax in your periodic VAT return. With an article 23 permit, you don't even have to pay the VAT in advance.

Do I have to pay customs duties under €150?

No, for shipments with a goods value up to €150 (excluding transport and insurance), an exemption from customs duties applies. Note: the VAT exemption for shipments up to €22 was abolished on July 1, 2021 - you always pay import VAT.

What is the difference between FOB and DDP when it comes to VAT in China?

With FOB, you arrange the import yourself and pay the VAT and customs duties - you have full control. With DDP, the Chinese supplier arranges everything, including VAT, but you have less control and the costs are often higher due to surcharges.

How do I apply for an article 23 permit?

You apply for the permit at the Tax Authority using the "Article 23 Application" form. The application is free, and processing usually takes six to eight weeks. You need a valid VAT number and KVK registration.

Are there any additional levies for certain products from China?

Yes, for some product categories, anti-dumping duties apply. These can be up to 70% extra on top of the regular customs duties. Check the EU TARIC database for your specific product code. Use the Boloo Keyword Verkenner to investigate which product categories are most profitable after deducting all levies.