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HMRC internal manual


Value for import VAT: normal rules: UK law

The law governing the value for VAT of imported goods is contained in section 21 of the VAT Act.

    • (1) For the purposes of this Act, the value of goods imported from a place outside the member States shall (subject to subsections (2) [to 4] below) be determined according to the rules applicable in the case of Community customs duties, whether or not the goods in question are subject to any such duties.

(2) For the purposes of this Act the value of any goods imported from a place outside the member States shall be taken to include the following so far as they are not already included in that value in accordance with the rules mentioned in subsection (1) above, that is to say-

(a) all taxes, duties and other charges levied either outside or, by reason of importation, within the United Kingdom (except VAT);

(b) all incidental expenses, such as commission, packing, transport and insurance costs, up to the goods’ first destination in the United Kingdom; and

(c) if at the time of the importation of the goods from a place outside the member States a further destination for the goods is known, and that destination is within the United Kingdom or another member State, all such incidental expenses insofar as they result from the transport of the goods to that other destination;

and in this subsection “the goods’ first destination” means the place mentioned on the consignment note or any other document by means of which the goods are imported into the United Kingdom, or in the absence of such documentation it means the place of the first transfer of cargo in the United Kingdom.

(3) Subject to subsection (2) above, where-

(a) goods are imported from a place outside the member States for a consideration which is or includes a price in money payable as on the transfer of property;

(b) the terms on which those goods are so imported allow a discount for prompt payment of that price;

(c) those terms do not include provision for payment of that price by instalments; and

(d) payment of that price is made in accordance with those terms so that the discount falls to be allowed,

the value of the goods shall be taken for the purposes of this Act to be reduced by the amount of the discount.