Importing goods into the European Union can be a major opportunity for non-EU companies. The EU is one of the largest consumer markets in the world and offers access to more than 440 million people through a highly integrated internal market.
However, importing into the EU is not only a logistics process. Companies must consider NC/Tarrif classification, origin, customs value, import VAT, product compliance, documentation and, in many cases, local VAT registration obligations.
At VAT & Green Tax, we assist international companies with Spanish VAT, EU customs and supply chain analysis. Our work focuses not only on compliance, but also on helping companies identify more efficient import structures from a VAT and customs perspective.
How to import goods into the EU correctly.
Before shipping goods to the European Union, companies should define the import structure clearly. It is important to know who will act as importer of record, where the goods will be cleared, which Incoterm will apply and how import VAT will be managed.
These decisions can have a direct impact on customs duties, VAT recovery, local registration obligations and the final landed cost of the products.
A poor import structure may create unnecessary VAT costs, cash-flow issues or even non-recoverable import VAT.
1. Identify the product and its tariff classification (NC code).
The first step is to determine the correct customs classification of the goods. Each product imported into the EU must be classified under a specific tariff code.
This code determines the customs duty rate, possible trade measures, import restrictions, documentation requirements and, in some cases, additional regulatory obligations (for example, CBAM).
Incorrect classification may lead to customs reassessments, penalties, delays or unexpected import costs. Companies should not rely only on supplier descriptions or generic logistics classifications.
Where there is uncertainty, it is highly advisable to obtain a Binding Tariff Information decision. In Spain, this is known as an IAV.
A Binding Tariff Information decision provides legal certainty on the tariff classification of a specific product. It can be especially useful when importing products with technical features, mixed materials, new technologies or unclear customs treatment.
At VAT Green Tax, we review customs classifications and assist companies in preparing and submitting Binding Tariff Information applications before the Spanish customs authorities.
2. Determine the origin of the goods.
The origin of the goods is another essential element in EU customs planning. Origin may affect the customs duty rate, access to preferential trade agreements and the application of certain trade defence measures.
If the EU has a preferential trade agreement with the exporting country, the importer may benefit from reduced or zero customs duties, provided that the applicable rules of origin are met.
Companies should review the origin of their products before shipment and ensure that the correct supporting documentation is available.
This is especially relevant for companies using complex supply chains, multiple manufacturing locations or products assembled in different countries.
3. Verify product compliance with EU regulations.
Before goods can be placed on the EU market, they must comply with the applicable European regulations.
Depending on the product, this may include safety rules, CE marking, labelling requirements, environmental obligations, health controls, technical standards or specific sector regulations.
Products such as electronics, machinery, toys, cosmetics, food, chemicals or medical devices may require additional analysis before importation. In many cases, it is necessary to comply with the corresponding EPR obligation, such as WEEE or batteries.
Failure to verify these requirements in advance may result in customs delays, blocked shipments, product recalls or enforcement actions by market surveillance authorities.
4. Prepare the required import documentation.
Accurate documentation is essential for a smooth customs clearance process.
Most imports into the EU require a commercial invoice, packing list, transport document and customs declaration. Depending on the goods, additional documents may be required, such as certificates of origin, licences, conformity documents or sanitary certificates.
The commercial invoice should correctly reflect the parties involved, the Incoterm, the value, the currency, the product description, the country of origin and the transaction conditions.
Errors in documentation may create discrepancies during customs clearance and increase the risk of inspections or reassessments.
5. Understand customs duties and import VAT.
When goods enter the European Union, customs duties and import VAT may become due.
Customs duties are generally calculated based on the customs value, tariff classification and origin of the goods. Import VAT is usually calculated on the customs value, plus customs duties and certain import-related costs.
The VAT rate depends on the Member State of importation and the type of goods.
This is a key point for non-EU companies. Import VAT is not always a final cost, but its recovery depends on the structure used, the country of importation and the VAT status of the importer.
Some EU countries may require VAT registration before import VAT can be recovered. Others may apply specific conditions for non-EU businesses, including reciprocity rules for VAT refunds.
6. Analyse the best EU country for import VAT recovery.
Choosing the country of importation should not be based only on logistics.
From a VAT and customs perspective, it is important to analyse whether the importer can recover import VAT, whether VAT registration is required and whether the relevant country imposes reciprocity restrictions on non-EU businesses.
For example, some jurisdictions may allow import VAT recovery more efficiently than others. In certain cases, import VAT deferment or reverse charge mechanisms may be available, improving cash flow and reducing financial exposure.
VAT & Green Tax offers VAT and customs analysis to determine the most efficient import structure within the EU. This includes reviewing the country of importation, VAT registration requirements, import VAT recovery, reverse charge options and supply chain flows.
For companies importing into Spain, a Spanish VAT analysis is particularly important when the goods are later sold locally or moved to other EU countries.
7. The problem with DDP for Chinese companies.
Many Chinese companies sell goods into the EU using DDP, or delivered duty paid.
Under DDP, the seller usually assumes responsibility for customs clearance, customs duties and import VAT. This may look simple from a commercial perspective, but it can create significant VAT and customs issues.
If a Chinese company imports goods into the EU under DDP, it may become the importer of record. After importation, the company may be considered to make a local supply in the country where the goods are delivered.
In Spain, for example, if the import is followed by a local domestic supply and the reverse charge mechanism applies, the structure may create a problem. The import VAT paid at customs may not always be recoverable in practice if the company does not meet the necessary VAT requirements.
This means that an apparently simple DDP model may generate hidden VAT costs.
For this reason, Chinese exporters and other non-EU companies should carefully analyse whether DDP is really the right Incoterm. In many cases, alternative Incoterms or a different import structure may be more efficient.
8. Use Incoterms strategically.
Incoterms define the responsibilities of the seller and the buyer in international trade.
However, they also have important VAT and customs implications. The chosen Incoterm may determine who is responsible for import clearance, who pays customs duties, who bears transport risk, and who may need to register for VAT.
DDP may be attractive for customers because it offers a simple purchasing experience. But for the seller, it may create EU VAT registration obligations, import VAT exposure and local compliance risks.
Other Incoterms may be more appropriate depending on the business model, customer profile and supply chain.
A customs and VAT review should always be performed before choosing the Incoterm for EU sales.
9. Consider customs representation.
Many non-EU companies use customs representatives or customs brokers to manage import formalities.
A customs representative may prepare and submit customs declarations, communicate with customs authorities and assist with import procedures.
However, customs representation does not replace proper tax and customs planning.
The company must still understand who is acting as importer, whether the declared value is correct, whether the tariff classification is defensible and whether import VAT can be recovered.
For non-EU companies importing into Spain or other EU countries, customs representation should be coordinated with Spanish VAT and EU VAT advice.
10. Optimise the supply chain from a customs and VAT perspective.
An efficient EU import model should combine customs compliance, VAT recovery and commercial practicality.
Companies should review the country of importation, the importer of record, tariff classification, customs value, origin documentation, Incoterms, VAT registration obligations, import VAT recovery, reverse charge mechanisms and subsequent local or intra-EU supplies.
This analysis is especially important for non-EU companies selling into Spain or using Spain as an entry point to the EU market.
A well-designed structure can reduce unnecessary costs, improve cash flow and avoid compliance risks.
FAQs about importing goods into the EU.
Do I need a company in the EU to import goods?
Not always. In many cases, a non-EU company can import goods into the European Union without having a local company. However, the structure must be reviewed carefully.
The company may need a customs representative, an EORI number, a tax number or a fiscal representative depending on the country, the goods and the type of transactions carried out after importation.
Can a non-EU company recover import VAT in the EU?
Yes, but it depends on the country of importation, the status of the importer and the applicable VAT rules. Some countries may allow refunds to non-EU businesses, but subject to reciprocity conditions.
Is DDP a good Incoterm for selling into the EU?
DDP can be useful from a commercial perspective because the customer receives the goods without dealing with customs formalities.
However, it can create VAT and customs risks for the seller. In many cases, DDP may trigger VAT registration obligations and import VAT recovery issues.
For non-EU companies, and especially for Chinese exporters, DDP should be reviewed before being used as a standard model.
What is the risk of using the wrong customs classification?
Using the wrong customs classification can lead to underpaid customs duties, penalties, delays, customs inspections and reassessments.
It may also affect import restrictions, licences, anti-dumping duties or regulatory obligations.
For complex products, obtaining a Binding Tariff Information decision can provide legal certainty.
What is a Binding Tariff Information decision?
A Binding Tariff Information decision is an official decision issued by the customs authorities confirming the tariff classification of a product.
In Spain, it is commonly known as an IAV.
It gives the importer legal certainty on the customs code to be used for that product, provided that the goods match the description submitted in the application.
Can Spain be used as an entry point into the EU?
Yes. Spain can be used as an entry point for goods entering the European Union.
However, companies should review Spanish VAT, import VAT recovery, customs representation, VAT registration and subsequent supplies within Spain or to other EU countries.
Using Spain as an entry point can be efficient, but the structure should be analysed in advance.
When should I review my EU import structure?
The import structure should be reviewed before the first shipment.
It should also be reviewed when changing suppliers, Incoterms, logistics routes, product categories, customer locations or countries of importation.
A preventive review is usually much cheaper than correcting VAT or customs issues after the goods have already been imported.
