Customs, Import VAT and Excise Duties

Customs and import VAT in Germany: the essentials

Customs and import VAT are the two main charges when goods enter Germany from outside the EU. Customs duties are EU own resources governed by the Union Customs Code (Regulation (EU) No 952/2013) and the Common Customs Tariff; German customs offices, part of the Federal Customs Administration, apply them on behalf of the EU. Import VAT (Einfuhrumsatzsteuer) is a German tax, levied at the regular VAT rates of 19% or 7% on the customs value plus duties and certain costs, and in most cases deductible as input tax by businesses. Excise duties on energy products, electricity, alcohol, tobacco and coffee apply in addition where relevant. Getting customs and import VAT right affects cash flow, landed costs and compliance risk.

For importers, three developments are particularly relevant in 2026: Germany's improved deferral of import VAT payment, the end of the customs duty exemption for low-value consignments, and the EU customs reform with its planned customs data hub. This article explains these points alongside the basics of tariff classification, valuation, origin and authorised economic operator status.

Customs basics: classification, valuation and origin

The amount of customs duty depends on three elements. First, tariff classification: goods are classified under the Combined Nomenclature, and the classification determines the duty rate and any trade measures. Importers can obtain legal certainty through binding tariff information issued by the customs authorities.

Second, customs value: in most cases the transaction value, meaning the price actually paid or payable, adjusted for items such as transport and insurance costs to the EU border, royalties and licence fees related to the goods, and certain assists. Related-party transfer prices require special attention, because customs and tax authorities may challenge them from opposite directions. Third, origin: preferential origin under free trade agreements can reduce duties to zero if the rules of origin are met and proven, while non-preferential origin matters for trade defence measures and labelling.

The customs debt arises when goods are released for free circulation. The declarant is the debtor, and where an indirect representative such as a customs broker acts in its own name, it is jointly liable. Importers therefore need reliable procedures for classification, valuation and origin, and should not leave these questions entirely to their brokers. Written instructions to brokers, periodic sample checks of declarations and a clear escalation route for unusual shipments are simple measures that auditors look for when assessing whether errors were negligent.

Import VAT and its deferral

Import VAT arises on the import of goods into Germany and is collected by customs. A business that imports goods for its taxable activities can usually deduct import VAT as input tax in its VAT return. The economic burden is therefore mainly a cash-flow issue. Germany historically required payment of import VAT shortly after import, while the deduction was available only later through the VAT return, which put German ports and logistics hubs at a disadvantage compared with member states that allow reverse charge accounting for import VAT.

The rules have been improved. Where a deferral of payment under the Union Customs Code has been granted, import VAT is due on the 26th day of the second calendar month following the month concerned (§ 21(3a) UStG), which allows importers to deduct the import VAT in their advance VAT return before payment falls due. In addition, the payment of import VAT can be deferred without security if the tax is fully deductible as input tax (§ 21(3) UStG). Importers should check whether they hold a deferral authorisation and whether their bank guarantee and processes are aligned with the new due dates.

Authorised economic operator status

The authorised economic operator (AEO) status is granted by the customs authorities to businesses that meet criteria on compliance, record-keeping, financial solvency and, for the security variant, safety and security standards. AEO status for customs simplifications facilitates access to simplified procedures, reduced or waived guarantees and centralised clearance, while AEO for security and safety leads to fewer physical and document-based controls and is recognised under mutual recognition agreements with several non-EU countries.

The application process involves a self-assessment questionnaire, an audit by customs and ongoing monitoring. For importers and exporters with significant volumes, AEO status is close to a necessity. It also signals compliance to authorities when other issues, such as export controls or sanctions screening, arise; see our page on export control and sanctions.

The end of the duty exemption for low-value consignments

Until now, goods in consignments with an intrinsic value of up to EUR 150 have been exempt from customs duties, although import VAT has applied since July 2021. The surge of small parcels from online platforms led the EU to remove this relief.

According to the Council of the EU, the Council agreed in November 2025 to eliminate the EUR 150 customs duty relief threshold, with duties applying from the first euro once the EU customs data hub is operational, and adopted a short-term measure: a fixed customs duty of EUR 3 applies to items in parcels valued under EUR 150 from 1 July 2026 until the data hub is operational, charged per product category rather than per parcel. The Council also states that the permanent removal will enter into force in 2028, and that a handling fee on small distance-sale consignments was agreed with Parliament on 26 March 2026.

For e-commerce sellers and platforms, these changes affect pricing, customs declarations and the use of the import one-stop shop for VAT. Platforms and sellers acting as importers bear the customs formalities, and repeated non-compliance can lead to financial penalties. Sellers should also review product data, because duties per product category require accurate classification of each item in a parcel. Our article on VAT in Germany for foreign businesses explains the VAT side of distance sales.

Customs and import VAT in group supply chains

For multinational groups, customs and import VAT interact with transfer pricing, logistics and contract structures. Year-end transfer pricing adjustments can change the customs value of goods already imported, which may require corrections of customs declarations or, where prices fall, applications for repayment.

Incoterms in intra-group and third-party contracts determine who acts as importer and who can deduct import VAT; a foreign seller that imports goods in its own name under DDP terms becomes the importer and generally needs a German VAT registration to recover the import VAT. Using a German group company as importer of record, or appointing a customs representative, can simplify the process. Where goods are moved into a customs warehouse in Germany and later sold within the EU or re-exported, the choice of procedure determines whether customs and import VAT become payable at all. Mapping these flows once and documenting the chosen model reduces errors at the border and disputes in later audits.

EU customs reform and the data hub

The EU is reforming its customs framework more fundamentally. The reform proposed by the Commission envisages an EU Customs Authority and an EU customs data hub that would replace the current national IT systems over time, with importers and platforms submitting data on goods and supply chains centrally. The timing depends on the completion of the legislative process and the development of the data hub, and the Council has linked the full removal of the low-value duty exemption to its operation. Businesses with significant import volumes, and logistics providers acting as customs representatives, should follow the reform closely, because it will change who is regarded as the importer, how data is submitted and how risk-based controls are carried out.

Excise duties, special procedures and compliance

Excise duties under German law apply to energy products, electricity, alcohol and alcoholic beverages, tobacco, coffee and certain other products. Goods subject to excise can be moved under duty suspension between tax warehouses using the electronic EMCS system. Special customs procedures, such as customs warehousing, inward processing and end-use, allow duties to be suspended or reduced where goods are stored, processed or re-exported. Each requires an authorisation, a guarantee in many cases and careful record-keeping, and the customs authorities audit compliance with the conditions of the authorisation.

Customs and import VAT errors can lead to post-clearance demands for up to three years, and longer in cases of criminal conduct, plus interest. Intentional or reckless evasion of customs duties or import VAT is a criminal offence or administrative offence under the Fiscal Code, and corrections should be made promptly. Where trade defence measures apply, such as anti-dumping duties, the risk increases considerably; see our article on anti-dumping and trade defence measures.

Illustration: a German retailer imports garden furniture from Asia through a broker acting as indirect representative. A customs audit finds that the goods were classified under a tariff heading with a lower duty rate and that royalties paid to the supplier's parent for the furniture design were not included in the customs value. Customs issues a demand for additional duties and import VAT for three years, with interest. Because the import VAT is deductible, the main cost is the duty and interest, but the retailer must also review whether anti-dumping duties apply to any of the products.

How TRW & Co helps with customs and import VAT

We advise importers, exporters, logistics providers and e-commerce businesses on customs and import VAT: tariff classification, customs valuation including transfer pricing interactions, origin and free trade agreements, AEO applications, deferral and guarantees, special procedures and excise duties. We represent clients in customs audits, appeals against customs decisions before the finance courts and in criminal and administrative proceedings, and we monitor the EU customs reform and low-value consignment rules. To discuss your supply chain, contact us. This article provides general information and is not tax or legal advice.