What are import duties and VAT, and who pays them?
A plain English explanation of import duties and VAT, who is responsible and how to avoid unexpected charges for your recipient.
Import duties and VAT are the charges a destination country applies to goods arriving from abroad. They catch out many first time international senders because they can be billed to the recipient after delivery. This guide explains how they work and how to avoid nasty surprises.
Import charges are the part of international shipping that catches people out most, because they are decided by the destination country rather than the courier. Knowing the rules in advance lets you set clear expectations and avoid refused deliveries.
Duties versus VAT
Duty is a tax based on the type and value of the goods and their country of origin. VAT, or its local equivalent, is a consumption tax applied on top. Both are set by the destination country, not by the courier.
Who pays: DDU versus DDP
Under delivered duty unpaid, the recipient pays charges before the parcel is released. Under delivered duty paid, the sender pays up front so the recipient receives the parcel with nothing more to pay. Choosing the right option keeps customers happy and reduces failed deliveries.
How Pigee helps
- Estimates likely duties and taxes before you book.
- Prepares accurate customs paperwork to reduce delays.
- Lets you choose who pays so your recipient is never caught out.
Frequently asked questions
Can I avoid import duties and VAT?
You cannot avoid lawful duties and VAT, but you can avoid surprises and penalties by declaring accurately and choosing delivered duty paid so the sender settles charges up front. Undervaluing a parcel is never worth the risk.
Who sets the duty rate?
The destination country sets duty and VAT rates based on the goods and their value. The courier only collects them, so the same parcel can attract different charges depending on where it is going.
For online sellers, choosing delivered duty paid is usually worth it, because a surprise bill on the doorstep is one of the biggest causes of refused parcels and bad reviews. Pigee lets you build that choice into how you ship.