Before a product can be sold on Amazon, there are a few steps to consider in the supply chain. The second station of the supply chain (after shipping) is customs. Since most Amazon FBA products are still ordered outside of Europe, the topic of customs is particularly important for Amazon merchants. Those who have contracted a freight forwarder for the transport usually do not have to deal with the topic of customs for Amazon FBA in more detail, as the freight forwarder takes care of the customs clearance. For all others, we have summarized the most important information.
1 – Import turnover tax vs. customs duties
When importing goods from third countries into the EU, duties are usually levied. These duties consist of any customs duties and the import VAT. Customs duties are incurred if a third-country customs duty is levied on the imported goods. How high the customs duties are and how the customs tariff can be calculated, we explain below in the article.
The import turnover tax, on the other hand, largely corresponds to the turnover tax incurred on the sale of goods or on deliveries within the European Union. It is payable on the total imported goods each time they are imported. As a rule, it amounts to 19%, in individual cases 7%. The basis for calculating the import turnover tax is the total turnover, which consists of the customs value, customs duty, excise duty and all other costs incurred before customs clearance within the EU. If there is no customs duty on the import of Amazon FBA goods, the invoice price serves as the basis for calculating the import VAT.
2 - Pre-check of the customs declaration
If goods from third countries are to be imported into the EU, the goods must undergo a clearance procedure. The standardised procedure begins with the preliminary examination as well as the acceptance of the respective customs declaration as soon as the consignment has arrived in the destination country. The processing time depends on the workload of the processing customs office, it can take from a few hours to several days.
During the preliminary examination, customs authorities check whether the declared consignment fulfils all the requirements, or more precisely whether all the necessary information is enclosed and whether the documents and authorisations are complete.
If the application is incomplete, it will already be rejected by the customs authority at this stage. If all the information is provided in accordance with the regulations, the customs authority must accept the application and customs clearance takes place in the next step.
3 - Clearance of customs with Amazon FBA
There are several automated procedures in the customs clearance process. The relevant customs procedures for the import of goods are the import procedures ("release for free circulation") and export procedures.
3.1 - Import
The import procedure is a prerequisite for importing goods from third countries into the EU. The "release for free circulation" is the most important customs procedure for goods that finally remain in the EU. In most cases, the release for free circulation is also accompanied by the release for free circulation for tax purposes. Thus, in addition to customs duty, import VAT and excise duty must also be paid in this step.
The import procedure is standardised, which means that the procedure is the same in all EU Member States:
- The goods are declared.
- The customs authority shall verify completeness.
- If the application is complete, the customs authority shall accept it.
- The Authority shall review the documentation.
- The verification shall determine whether duty is payable.
- The goods are released "for free circulation".
3.2 - Export
Exports from an EU Member State to a third country are less common. If goods are nevertheless exported from the EU, a two-stage procedure must be followed. In the first stage, the competent inland customs office is notified of the arrival at the customs office. An electronic export declaration is submitted for this purpose. After successful verification, the customs office issues an export accompanying document (ABD). In a second stage, the goods to be exported are declared to the customs office. After the ABD has been checked, the goods are released for export.
4 - Customs for Amazon FBA - What are the rates and costs?
When importing from third countries, duties such as customs duty, import turnover tax and excise duties may be levied. Excise duties may include duties such as tobacco duty, alcohol duty, coffee duty or energy duty.
The amount of duty can be derived from the customs tariff. This contains a so-called third country duty rate (standard duty rate) for each product. The customs duty rate is needed to calculate the amount of customs duty. In principle, the amount of customs duty can be calculated as follows:
Amount of duty = customs value x customs rate
In order to determine the exact amount of the customs duty, the customs tariff number of the imported goods can be found on the website of the Electronic customs tariff (EZT) the third country duty rate in percent can be queried. In addition to the amount of the customs duty, information on taxes, import conditions and legal provisions can also be viewed there.