VAT and Import Duty Explained

Do you know your onions from your ginger or even your garlic? According to a recent article on the BBC website, garlic has been causing a stink in Scandinavia. Huge quantities are being illegally imported into Europe from China where it can be grown cheaply. Import taxes are added in Europe to prevent a mass importation of garlic that would undermine production in European countries. However, crafty smugglers are bringing cheap garlic in under false identities – even labelling it as ginger or apples (what a horrible thought) and bringing it across the border as contraband to avoid paying the taxes. Countries that are targeted by smugglers are the UK, Italy and Poland.

Why are taxes a good thing?

The garlic example is useful because it illustrates how taxes can be used as a protective measure against imports that will have a direct impact on the agricultural economy of a country. Taxing imports at a relatively high level makes it less attractive to import and evens out the market to create a ‘level playing field’. Countries set their own levels of tax on different goods; for example anyone trying to import cheap pasties into Cornwall or haggis into Scotland would be deterred if the import taxes were high.

Here at forward2me, we don’t charge VAT for companies if they are VAT registered but we have to for consumers. The good thing is that if you live in the EU you won’t have to pay import taxes or VAT on the goods again in your country of residence. If you need more advice about taxes, have a look at the following pages for information or contact us directly at forward2me:

Hopefully you won’t find using forward2me too taxing!