Due to the growing popularity of e-commerce, more and more goods are being purchased from outside the EU. Once these goods enter the EU, import duties are due. It may happen that these goods are returned, or possibly the goods do not meet the expectations you had with the product. In that case, are there any possibilities to reclaim the import duties paid?
Import duties in general
When importing goods within the EU, import duties are in principle payable. These import duties are in principle final and therefore cannot be reclaimed (unlike import VAT, which can be reclaimed under conditions). This means that these import duties are a cost item. However, the European regime also has an exemption for goods of "negligible value. This concerns goods with a customs value of no more than € 150. This exemption is likely to disappear in the future, making it extra important to highlight the provisions surrounding the reclaiming of import duties.
Import duty refund
There are three exceptions in which refund of import duties is still possible.
In a nutshell, the following situations can, under conditions, lead to a refund of import duties:
1. Defective goods: Goods that are defective - such as damage at the time of importation - may be eligible for a refund. The importer must be able to prove that these damages occurred before the goods were imported. Therefore, the defects must not have occurred after the importation of the goods. The application for a refund must be made within one year of the importation.
2. Non-conforming goods: Goods that do not comply with the specifications of the (purchase) contract may also be entitled to a refund. The application for refund must be made within one year of importation.
3. Returns in Distance Contracts: This refers to goods sold through e-commerce and returned by the consumer for various reasons. The refund request must be made within 90 days. It must also be shown when the goods entered the EU and then also when they have (or will) leave the EU again. In addition, the intervention of a distributor can lead to discussion as to whether there is a distance sale.
In conclusion
Import duties paid when importing goods into the EU are, in principle, a cost for your company. In this article we have described various possibilities for reclaiming the import duties paid. In each case, the specific circumstances play an important role and it should be critically examined whether all conditions for refund are met.
Do you, as a business owner, have questions about import duty refunds? Please feel free to contact us via your relationship manager, by email at btw@govers.nl, or by phone at 040 - 2 504 504. Of course, you can also contact us with all your other tax questions.