Tax basis for imported goods
The tax basis for imported goods includes
- customs value
- customs duties and other fees charged by the Customs
- freight costs, such as the costs of transportation, loading, unloading and insurance.
Even though as of January the Tax Administration is responsible for the collection of import VAT, the basis for or calculation of tax assessment has not changed.
The customs value and duties charged by the Customs are indicated in the customs decision. Freight costs comprise of domestic freight costs to the first destination in Finland in accordance with the transportation agreement. However, if the final destination of the goods is known at the time of importation, freight costs are calculated up to the last known destination. The share of domestic freight is determined by dividing the sum of customs values at different VAT rates by the domestic freight costs.
Example: Tax basis
A VAT registered company imports goods from Russia to Nuijamaa, Finland. The goods are then transported onwards to Helsinki, which is the final known destination and known at the time of importation. The customs date on the customs decision is 15 May 2018. The customs decision indicates that the customs value of the goods amounts to €12,550. Customs duties and other fees charged by Customs total €623.75. The costs of unloading and loading the cargo onto lorries and transport from Nuijamaa to Helsinki total €1,926.25. The tax basis for import VAT is €15,100 (customs value €12,550 + custom duties €623.75 + unloading and loading the cargo as well as transportation from Nuijamaa to Helsinki €1,926.25).
Example: Calculating cargo
A sole trader imports goods subject to different VAT rates into Finland. The customs value of the goods subject to the general VAT rate (24%) is €1,000 and that of the goods taxed at a VAT rate of 10% is €1,500. The total customs value of goods included in the delivery is thus €2,500. The domestic freight costs of the delivery amount to €80. The share of freight costs accounted for by goods taxed at the general VAT rate (24%) is determined by dividing the value of these goods (€1,000) by the value of all the goods (€2,500). Ratio is €1,000/€2,500 = 0.40. Share of freight is 0.40 x €80 = €32. The sole trader reports these freight costs (€32) in the VAT return under "Imports of goods from outside the EU". Share of VAT (24%) is €32 x 0.24 = €7.68. It is reported under "Tax on imports of goods from outside the EU".
Goods taxed at the lower tax rate (10%) account for €1,500 of the delivery. This amount is divided by the total value of the delivery, which is €2,500. The ratio is €1,500/€2,500 = 0.60. Share of freight is 0.60 x €80 = €48. The sole trader adds €48 in the VAT return under "Imports of goods from outside the EU". Share of VAT (10%) is €48 x 0.10 = €4.80. It is included under "Tax on imports of goods from outside the EU".