We get inquiries on a daily bases about the best way to import a classic car into Europe and what duty and VAT rates apply. There are comments in various forums from people that have saved import duty and VAT on their classic car import. If you consider a classic car import into the EU, and want to find out why some importers pay € 1.000 in import duty and VAT and others pay up to € 6.500 (on a car value of € 20.000 ) please read the article below. We have many years experience in importing cars from USA and other countries into the EU and are happy to share our experience with you.
In which country can the classic car import clearance take place?
The country where the importer resides and wants to register his classic car does not have to be the same country where the import customs clearance has to be filed, as long as both countries are EU member states. Most import clearances take place at the border of the EU and not where the importers are located. For private persons the duty and VAT for their classic car import is collected where the declaration is filed (slight other rules apply for commercial imports) and no additional VAT is due in the country of registration.
This opens the opportunity to choose the location for your classic car import so that it is most ideal for you and enables you to take advantage of duty and VAT “friendly” EU countries.
However, when importing cars it is important to obtain to proper import documents from the customs agent proofing that duty and VAT have been paid. Some countries issued specific forms that proof the proper import of cars, but are not accepted by other countries. Ensure that you will receive an SAD customs form that all countries have to accept.
Customs duty and VAT savings on classic car import.
The import duty for cars is the same for all EU countries and currently set at 10%. The import duty is calculated on the dutiable value (= purchase price of the car plus costs that incur to transport it to Europe e.g. transportation, ocean freight, insurance, port charges). The VAT is calculated on the dutiable value plus the import duty amount. The VAT rates in Europe vary and go up until 25%.
However as per the customs tariff classic cars can be also classified as “collector’s pieces of historical interest”. This is interesting for importers of classic cars, because the import duty rate is 0%.
For such collector’s cars some countries apply a reduced VAT rate for such on top of the reduced duty. Currently the lowest VAT rate on classic car import is applied in UK at 5%.
The customs duty and VAT for importing the same classic car in different EU countries can vary enormously. For example: A fictive classic car with an import value of € 20.000 could be imported in UK for € 1.000 in import duty and VAT where the charges in Germany would be € 5.000 and in some Scandinavian countries even up to € 6.500. The difference is based on qualifying for 0% duty a a collector’s item and varying VAT rates across Europe.
This is the reason why importers of classic cars who were aware of the rules and who worked with experienced companies saved a lot of import charges.
Criteria for qualifying for the reduced duty and VAT rate for classic car import.
The EU has put forward guidelines on how customs officers can determine if for the import tariff of classic cars is considered as a “normal” car or a collector’s item.
If you are interested in the details please read the explanatory notes of tariff classification for classic car import .
Maybe you can’t determine what these rules mean for the import of your car and a fact is that in most countries your car wouldn’t qualify as a collector’s item of historic interest (unless it was owned at one point in time by let’s say Elvis or if it is imported for a museum).
Often the customs officers are not qualified to judge whether the classic car in front of their eyes meet the criteria for the lower duty and VAT rate and therefore they just reject it. Some customs authorities require an expert survey that states to originality, condition and value of the car. This can cause further challenges if the value is judged differently by the surveyor in an EU country vs. the price the buyer paid for and declared.
Why we prefer UK as the customs location for the classic car import for our clients:
In our opinion and experience UK is the best place for your classic car import. We regularly import classic cars for following reasons:
- At only 5% it is the lowest import VAT rate of all EU member states.
- Many classic cars are imported in UK at 0% duty and 5% VAT.
- We are able to meet the expectation of our clients and all our classic car imports in UK were cleared at 0% duty and 5% VAT.
- The UK authorities are professional, fast and reliable. Clear guidelines how to apply the EU rules make the judgment straight forward.
- We always apply for a Binding Tariff Information (read more about BTI) and the UK authorities are very responsive and act fast on the applications.
- Being a large classic car market UK has very well established transportation networks.
The background why this works so well in UK is that customs demanded payments of £ 270.000 for duty and VAT from a classic car importer but lost the subsequent court case. The decision of the court ruling has put forward much more clarity on the requirements then the common EU rules. Read here about the court decision for import of classic cars or this article from the Federation of British Historic Vehicle Clubs.
Our working method for classic car import clearance and transportation.
Clients are interesting in reliable quotations and procedures that eliminate cost surprises and choose our services, because our way of working includes a written agreement with customs prior to shipping the classic car to Europe. I have been importing a few million cars from the US and Asia into the EU my previous employers and Locum Services manages a large customs program for a car manufacturer. We have excellent knowledge about the customs law and deal with the customs authorities on a daily bases. The points below describe the steps that we take.
• We ask clients to provide details about their classic car and receive back a description, pictures and supporting documents.
• Based on our experiences we judge which vehicles will qualify for a classic car import at the reduced rates and which ones not and discuss the options with out customers.
• We provide a fixed price quotation for transport, insurance, customs fees and the expected import duty / VAT charges.
• After the acceptance of the proposal by our clients we apply for the BTI and prepare the transport in the mean time. The UK authorities aim to issue their decision within 3 weeks often it takes only 10-12 days.
• With the ruling in our hands we ship the vehicle to UK clear them in the port and immediately transport them to the client’s final destination.
• We pay all costs to the UK authorities and charge them together with the rates for the agreed services to our clients.
• We ensure all documents are issued and approved by the UK authorities and send them to the client.
If you consider a classic car import and you want to save import duties and VAT than please contact us. We are happy to take a look at your case.