Customs law private

Duty-free shopping: What you need to know

People like to go shopping when they are on vacation. On the way home, vacationers often cross the external borders of the EU. At that point, the question arises as to whether the souvenirs are subject to duties and import VAT, or whether they can be brought back duty-free.
Traveler’s Allowances

As a general rule, all kinds of goods can be brought into the EU by consumers as long as they do not exceed the traveler’s allowances. The traveler’s allowances depend on the means of transport used and the age of the person importing the goods. Goods up to a value of 430 euros can be brought back duty-free by air or sea. Other travelers can import goods up to a value of 300 euros.

Travelers under the age of 17 can import goods up to a value of 175 euros duty-free. In addition, goods up to a certain amount can be imported duty-free without risks to consumers.

The problem with counterfeit goods

Consumers are also allowed to bring back counterfeit goods duty-free, as long as they do not exceed the traveler’s allowances. As compared to a commercial import, the consumer thus need not worry that the “Gucci” handbag or “Rolex” only cost a fraction of the actual price. However, consumers wanting to bring back goods duty-free should keep a receipt upon entry. Often, the counterfeit products are confusingly similar to the genuine products. In such a case, the customs authorities could use the price of the genuine product as a reference for calculating the duties instead of the actual price paid and instigate criminal proceedings for tax evasion upon return. However, even if the traveler’s allowances have been exceeded, counterfeit goods can be brought into the EU duty-free. Customs will only charge a third-country duty and import VAT. The customs declaration itself is free of charge.

First point of entry into the EU matters

To calculate the duties, it is important to identify where the external EU border was first crossed. In particular when traveling by air, there can be some unpleasant surprises if the German customs authorities realize that goods have not been cleared from Customs, because this, as a rule, constitutes a regulatory offence or even tax evasion. Not every airport has transit areas that carry out customs clearances. As a rule of thumb, you can use passport controls for orientation. This is normally the place where goods must be declared to customs.

It is important to note that customs duties are the same throughout the EU, but import VAT differs from one Member State to another. While Germany charges a standard import VAT rate of 19%, France imposes 20% and the Netherlands 21%. Denmark even imposes 25%. Therefore, it makes sense to enter the EU from Germany to import goods duty-free without risks for consumers. The good news is: Once the goods have been duly imported into the EU, they can be transported duty-free between the Member States without risks for consumers.