A guide to EU’s excise and custom duty

To export into Europe (EU) or any other countries across the globe, businesses need a strategy that works. It’s not just about marketing and finance; it’s also about managing the logistics. And this includes understanding the shipping regulations such as customs duty, excise taxes, tariffs, and more. But, what makes Europe such an attractive continent for businesses in India to branch out into, and how do you import into the EU?

The EU's inhabitants span a wide range of socio-economic demographics of 44 countries and a total of 748 million people. As such, exporting your product into Europe can prove beneficial for your business due to the numerous varieties of consumers and their demands. Based on a report released by Europa, Europe ranks as the second-largest destination for Indian exports, with trading services between the European Union (EU) and India having increased by 30% in the last decade. For instance, in 2021, the trading partnership between the EU and India yielded €88 billion in goods, a number which accounted for 10.8% of Indian trade for that year, reported the European Commission.

The strong trade relationship between India and the EU can provide many Indian businesses and investors incentive to move their trade to or do cross-border e-commerce to the EU. However, as mentioned earlier, before one can export to the EU, there are a number of import duties, tariffs, and taxes to be paid. This article aims to provide a clearer outlook on Europe’s import regulations and taxes.

Europe’s import tariffs regulations

When you import goods into the EU and other parts of Europe, they will need to be declared to the individual customs authorities of the country in which they are being shipped. Each product carries a tariff code, which one will be able to check via the Tarif Intégré de la Communauté (TARIC), a system that provides information on all trade policies and tariff rates pertaining to the product in question. The tariff imposed ensures that domestic products are able to compete fairly with external or international products. While this tariff applies to all EU members, the rates of duty differ depending on the import on which the tariff is being applied.

Due to the EU’s trade agreements, Europe has a relatively open economy. According to Eurostat, in 2021, 70% of the imports that entered the EU were shipped in at zero tariffs, especially when the trade occurs between members of the customs union. Unfortunately, this does not apply to businesses and merchants residing in India. According to MoneyControl, the EU announced earlier this year that exports from India will become ineligible for tariff benefits from 1 January 2023. As such, from 2023 onwards, products being exported from India into the EU will have to be checked and paid for using the EU customs duty on specific products.

The EU’s import regulations

There is a range of EU import taxes, duties, and regulations to be mindful of when importing into Europe. These are a few of the key facts to take note of when importing your product: EU custom tariffs, rules of origin, import tax, import duties, import procedure, product requirements, and EU customs regulations. All of this information pertaining to your product can also be checked via the Access2Markets portal.

Once a business or an investor chooses to buy goods from a non-EU country, they are classified as an importer. This subjects them to pay customs duty alongside Value Added Tax (VAT) payments. To make it easier for businesses outside of the EU, an Import One-Stop Shop electronic portal was introduced so that the correct amount of VAT will be paid to the respective Member State to which it is due. All these simplify the process of businesses in India and the rest of the world by enabling you to collect, declare, and account for VAT. In turn, you can pay your bills directly to the EU Tax Authorities through a periodic tax return. 

Simply reach out to us today if you’d like to find out more information about the latest Europe VAT de minimis removal. 

The EU’s excise duty

Importers into the EU may have heard about excise duty. However, this is inherently different from custom duty. While customs duty refers to a tax applicable to the import or export of certain products, excise duty refers to a tax on goods produced domestically and can be considered harmful to society by the governing power of said society, such as tobacco or alcohol. 

Hence, the excise tax is only something to consider when your business produces the goods domestically for shipping in the EU. As for VAT rates, each country in the EU has its own VAT rates and regulations in reference to individual products. 

Start shipping into the EU with DHL Express

In addition to the customs duty, and import tariffs, you will also need to know the right way to ship your products overseas. For instance, the shipping of liquid follows very stringent import regulations and could be restricted or prohibited by some couriers. As such, having an experienced and world-leading logistics partner like DHL Express India can guide you on these brass tacks.

When shipping to the EU or any country with DHL, we will require you to furnish us with the following information on the shipping label, also known as the waybill:

• Shipper’s and Receiver’s contact information like phone numbers, mailing address, and email address
• A complete description of the shipment’s contents – what the goods are and the quantity within the shipment 
• Details such as the number of packages in the shipment, total weight, and dimensions of the shipment 
• Supporting services like shipment protections if any. 
• Whether the shipment is dutiable, the value of the goods, as well as their associated codes. 
• If required, the export licence number, the receiver’s VAT number, or the shipper’s Employee Identification Number (EIN).

Along with the shipping label, your shipments may require other documents like a customs invoice or even destination-specific documents. 

So, no matter your business or goods, our team of committed experts is equipped with the essential knowledge to reduce your shipping costs and ensure that your import into the EU goes smoothly. Sign up for a DHL Express account today to experience quick and hassle-free shipping.