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UPS Supply Chain Solutions®

Value Added Tax (VAT)

What is a Value Added Tax (VAT)?

A tax on imported goods, paid in addition to other duties due. It is called a "value-added" tax because it is applied throughout the supply chain - on everything from the point of raw materials up to manufacturing and retail.


VAT varies by country, but it is generally between 7 and 20 percent of the value of the merchandise. For imports, VAT is based on the customs value of your goods.


The United States does not currently charge a VAT tax on imports, but you will likely have to pay this tax if you import goods into the European Union. In such cases, you may be required to have a VAT ID (also called a VAT registration number). For more information on how to apply for a VAT ID (and whether or not it is necessary for you to do so), it may benefit you to contact a fiscal representative.


Related Terms

Customs Broker Customs Clearance Fee Customs Value


Related FAQs


What do I need to know about the changes to the European Union Value-Added Tax (VAT) in 2021?

What is a Customs Broker?

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