VAT taxable amount of the import

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garconletton

Senior Member
Latvian
Hello!

I have to translate a text dealing with VAT exemptions for imports and VAT evasion. Could anybody please explain me what does "VAT taxable amount of the import"? In several contexts I see that "taxable amount" is "tax basis"? could it be so? in other words, could it have the same meaning as "VAT basis for the import [imported goods?]"?

Here is the context: These values [i.e. statistical value and customs value] are lower than the VAT taxable amount of the import as the latter includes other charges such as transport costs...
 
  • heypresto

    Senior Member
    English - England
    I think the 'VAT taxable amount' would be the amount at which (or above which) VAT will be charged.
    I don't know what 'tax basis' or 'VAT basis' mean so can't comment on whether they mean the same thing, or whether either means 'taxable amount'. :confused:
     

    PaulQ

    Senior Member
    UK
    English - England
    As far as I am aware, an import is taxed on its various components and the cost of bringing it to the country. Thus if we have a machine where (i) the body is made in the EU and EU VAT has been paid in the country of origin, but (ii) the engine was made in a foreign country and (iii) the shipping cost from a foreign country is £XX, then the "VAT taxable amount of the import" will be the value of the engine only and the value of the cost of transport (if from outside the EU) If VAT has been paid in the EU, VAT is not payable on arrival in another EU country.

    The situation is, in fact a lot more complicated. What happens if the pistons of the foreign built engine are made in the EU but the block is made in Russia? Or what happens if the pistons were made in e.g. UK, were exported to Syria, mounted in an engine made in China, and sent to have the cylinder head fitted in Belgium before the whole machine was put together in Spain? (Horrible!)

    In very simple terms it is the portion of the article's components that are subject to VAT.

    Edit to add - there are various levels of VAT within the EU, usually 3 levels: 0%, X% and >X%; it is possible that the component could be charged at different levels = VAT basis.
     
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    garconletton

    Senior Member
    Latvian
    Thank you for the broad explanation! Yet I find it confusing that in various official documents those terms are translated differently.

    Extract from the Sixth Council Directive 77/388/EEC:

    TITLE VIII TAXABLE AMOUNT

    Article 11

    A. Within the territory of the country 1. The taxable amount shall be: (a) in respect of supplies of goods and services other than those referred to in (b), (c) and (d) below, everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser, the customer or a third party for such supplies including subsidies directly linked to the price of such supplies;

    (b) in respect of supplies referred to in Article 5 (6) and (7), the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined as the time of supply;

    (c) in respect of supplies referred to in Article 6 (2), the full cost to the taxable person of providing the services;

    (d) in respect of supplies referred to in Article 6 (3), the open market value of the services supplied.

    [...]

    2. The taxable amount shall include: (a) taxes, duties, levies and charges, excluding the value added tax itself;

    (b) incidental expenses such as commission, packing, transport and insurance costs charged by the supplier to the purchaser or customer. Expenses covered by a separate agreement may be considered to be incidental expenses by the Member States.
    <Other languages deleted by moderator.>
     
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