LandedPulseHow is VAT applied to an import?
Import VAT is calculated over the composed base — goods value, freight, insurance, duty and any surcharge together — not over the invoice price. That is why the same goods cost more in tax when imported than when bought domestically.
The order matters. VAT is the last component applied, which means every earlier component enlarges the base it is charged on. A surcharge does not just cost its own percentage; it also increases the VAT owed.
Rates and thresholds differ by destination and, in some jurisdictions, by subdivision. Reduced rates for specific product categories exist in many schedules and are not inferable from an HS code alone, so a reduced-rate claim is treated as context the query does not carry.
Recoverability is a separate question from the calculation. A registered business may reclaim import VAT, but it still funds the cash outflow at clearance, which is why it belongs in a landed cost figure used for working capital planning.
Last reviewed . General guidance on import duty mechanics, not customs or tax advice for a specific shipment.