Import VAT (EUSt) is the value-added tax levied on the importation of goods from non-EU countries into Germany, sec. 1 para. 1 No. 4 German VAT Act.

According to sec. 21 para. 2 sentence 1 German VAT Act, the provisions for customs duties apply mutatis mutandis to the occurrence and liability of import VAT. Therefore, unlike other VAT, the customs administration is responsible for its collection. The assessment by the customs administration is carried out jointly with customs duties and special excise duties when the goods are released for free circulation. In this case, import VAT arises pursuant to sec. 21 para. 2 sentence 1 German VAT Act in conjunction with Article 77 (1)(a) UZK when the goods are released for free circulation.

Depending on the type of goods imported, either the standard VAT rate (19%) or the reduced VAT rate (7%) applies. However, there are also various exemption provisions for import VAT.

The taxable amount for import VAT is based on the customs value of the imported item (sec. 11 para. 1 German VAT Act). Therefore, the regulations for determining the customs value are also significant for determining the taxable amount for import VAT. The taxable amount also includes the customs duties assessed and, if applicable, other costs.
The application of customs regulations resulting from the reference in sec. 21 para. 2 sentence 1 German VAT Act is subject to significant restrictions by ECJ case law. This is particularly the case if import VAT arises due to a violation of customs regulations within the meaning of Article 79 UZK (see below).

Occurrence of import VAT upon importation

The emergence of the import VAT liability is determined mutatis mutandis by the rules for customs duties (sec. 13 para. 2 in conjunction with sec. 21 para. 2 sentence 1 German VAT Act). This is because import VAT is assessed by the customs authorities in a notice under the same procedure and based on uniform findings as customs duties.

A distinction must be made as to whether import VAT arises as part of the regular procedure (by proper import clearance) (then Article 77 UZK) or due to a violation of customs regulations (then Article 79 UZK).

Proper import clearance according to Article 77 UZK

The import VAT liability arises by analogous application of the rules for customs duties together with the customs debt. The customs debt arises under Article 77 (1)(a) UZK when goods are released for free circulation. The relevant point in time is the acceptance of the customs declaration by the customs office, Article 77 (2) UZK. The release into free circulation is colloquially also referred to as import.

Upon import, the item is physically transported from outside the EU into the EU territory (Article 30(1) VAT Directive). Import VAT arises in Germany when goods are imported into the domestic territory within the meaning of the German VAT Act (sec. 1 para. 2a sentence 3 German VAT Act). By way of exception, import VAT also arises if the item was initially physically transported to another Member State, transferred there to a special procedure (e.g., transit procedure), and then transported on to Germany (cf. Article 71(1) VAT Directive).

The declarant of the goods is liable to pay the import duties, including import VAT (Article 77(3) UZK). The declarant is the person who makes the customs declaration in their own name or for whom the customs declaration is made. This also covers indirect representation, where both the representative and the represented party are jointly liable as debtors for customs duties.

A person may also become a customs debtor if they provided the information required for the customs declaration, and if the incorrect information resulted in import duties not being charged, in whole or in part. This applies if the person providing the information knew or should have known that the information was incorrect (Article 77(3), subparagraph 2 UZK).

Violation according to Article 79 UZK

The customs debt also arises in cases of breaches of customs obligations (Article 79(1)(a) UZK). This includes illegal importation ("smuggling"), where goods from non-EU countries are not presented to customs upon crossing the border. It also covers procedural violations, where goods are removed from customs supervision. For example, this occurs when goods are in a special customs procedure and the holder removes them from the procedure without proper customs declaration (e.g., removal from a customs warehouse).

The import duty debt arises at the point in time the violation is committed (Article 79(2)(a) UZK). The person subject to the customs obligation becomes liable for import duties (Article 79(3)(a) UZK). The purchaser of the goods may also be liable for import duties and import VAT if they knew or should have known about the violation.

Unlike the customs debt, the import VAT debt that arises under Article 79 UZK cannot subsequently be extinguished under Article 124 UZK, for example, by re-exporting the goods.

Divergence between import VAT debt and customs debt

Due to the strict reference in sec. 21 para. 2 German VAT Act, under which the provisions for customs duties are applied mutatis mutandis to import VAT, the customs administration previously assumed that the emergence of the customs debt automatically triggered the import VAT debt. A provision like sec. 21 para. 2 German VAT Act is also found in the legislation of many other Member States.

However, in several rulings, the ECJ has qualified this view. The reason is the fundamentally different systems. While customs duties follow the logic of the UZK, import VAT is a value-added tax according to the VAT Directive. When applying the customs provisions mutatis mutandis, the inherent values of the VAT system for import VAT must always be taken into account.

In particular, the rigid application of Article 79 UZK does not do justice to the specific nature of import VAT. The ECJ has therefore lifted the accessory nature, stating that for the import VAT debt to arise, an additional, unwritten element must be fulfilled. According to ECJ case law, it is necessary for the goods to have entered the economic cycle of the Union. If it can be proven that there is no risk of the goods entering the economic cycle of the Member State, there is no room for the import VAT to arise in that Member State.

Some relevant ECJ rulings include:

• ECJ judgment of 06/02/2016, Cases C-226/14 and C-228/14 - Eurogate Distribution and DHL Hub Leipzig

• ECJ judgment of 06/01/2017, Case C-571/15 - Wallenborn Transports

• ECJ judgment of 07/10/2019, Case C-26/18 – Federal Express (Customs Newsletter 04/2019: ECJ on the incurrence of import VAT in cases of conduct contrary to customs law)

• ECJ judgment of 03/03/2021, Case C-7/20 – Place of origin of VAT (Customs Newsletter 01/2021: ECJ confirms its case law and perspective on the concept of import VAT)

• ECJ judgment of 06/12/2025, Case C-125/24 – Palmstråle (Customs Newsletter 07/2025: ECJ on returned goods: no import VAT in the event of formal breaches of customs legislation)

We also report on current ECJ decisions regarding import VAT in our newsletter: Subscribe to our newsletter.

Input tax deduction

Under the conditions of sec. 15 para. 1 No. 2 German VAT Act, the entrepreneur can claim the import VAT as input tax. The entrepreneur must have imported the goods for their business, and the import VAT must have arisen. It is not required, however, that the VAT has already been paid.

The input tax deduction can only be exercised within the advance return period in which the import VAT arose and the entrepreneur first possesses the relevant documentation. The relevant document is the import duty notice.

1.    Import VAT incurred
The entrepreneur must prove the occurrence of import VAT by means of an official customs document, for example, the assessment notice (sec. 15.8 para. 1 sentence 2 German VAT Application Decree). The entrepreneur may also claim the import VAT as input tax even if they are not themselves liable for the import VAT, for example, if the freight forwarder is liable (sec. 15.8 para. 7 German VAT Application Decree).

2.    Import for business purposes
An import for business purposes is deemed to exist if the entrepreneur has cleared the imported item for release into free circulation in Germany and then uses it in their business activities to carry out taxable transactions (sec. 15.8 para. 4 sentence 1 German VAT Application Decree). This requires that the entrepreneur uses the item themselves and thus its value for their output transactions (sec. 15.8 para. 4 sentence 2 German VAT Application Decree). The ECJ describes the requirement such that entitlement to input tax deduction exists if the costs of the input transaction are included in the price of the output transactions or in the price of the goods or services supplied by the entrepreneur in the course of their economic activity (see ECJ, judgment of 06/25/2025, Case C-187/14 - DSV Road).

According to the tax authorities, an import for business purposes only exists if the entrepreneur has the power of disposition over the item at the time of import. The VAT regulations regarding the place of delivery (sec. 3 para. 6 to 8 German VAT Act) are decisive for determining the time at which power of disposition is acquired (sec. 15.8 para. 4 sentence 3 German VAT Application Decree). Against this background, in practice it is particularly important which party registers the goods for release into free circulation. If this is done by the entrepreneur based in a non-EU country, the place of supply is in Germany. The tax authorities assume in this case that the non-EU entrepreneur has the power of disposition over the item at the time of import.

Persons who merely participate in the importation of goods, such as freight forwarders or carriers, are not entitled to input tax deduction. In practice, problems often arise with commission trading, processing (contract refining), deliveries via consignment warehouses, or leasing.

Exemption provisions

1.    General VAT exemptions
The general VAT exemptions under sec. 5 para. 1 German VAT Act and sec. 25c German VAT Act also apply to the collection of import VAT. Thus, imports of goods are exempt from import VAT if the supply of those goods is also exempt from VAT.

In addition, the use of the so-called “procedure 42” under sec. 5 para. 1 No. 3 German VAT Act (fiscal clearance or EU clearance) leads to exemption from import VAT. Here, the debtor of import VAT uses the goods immediately after importation to carry out intra-community supplies.

2.    Special VAT exemptions
Further exemptions (e.g., for returned goods, household effects, as well as containers and packaging) are contained in the Import VAT Exemption Ordinance (EUStBV). It also includes a VAT exemption for the import of goods for temporary use (sec. 1 para. 2 EUStBV in conjunction with sec. 11 EUStBV).

In principle, the EUStBV exempts all imports from import VAT that are also customs duty-free under customs regulations.

At the KMLZ Academy, we regularly offer webinars and seminars on all aspects of customs law and especially import VAT—from the basics of import VAT to input tax deduction and exemption provisions to optimizing the supply chain. Our formats are aimed at both beginners and experienced professionals.