Importing from China and import duties

Since the 18th century, Dutch companies have been importing products from China. Due to the favourable location of the Netherlands, good infrastructure connections, and large central ports, about 2 thirds of our imports from China are re-exported, mainly to other EU countries. Before doing business with a Chinese supplier or manufacturer, check whether this party is reliable, which documents you need, and whether you can expect extra costs, such as import duties.

As a Dutch entrepreneur, you can easily contact a Chinese manufacturer or supplier via the internet. In this article, you can read what you have to take into account when you import products from China.

Chinese business partner

Once you have found a Chinese supplier and want to do business with them, you need to check whether this party is reliable.

Most countries have a commercial register where you can check whether the company you want to do business with is registered. However, this does not tell you anything about the reliability of the company. In China, the National Enterprise Credit Information Publicity System manages this registry. The registry provides company information such as the company name, the registration number, and the activities of the company. This website is available in Chinese only.

For companies registered in Hong Kong, you can visit the official website of the government in Hong Kong The Cyber Search Centre of the Integrated Companies Registry Information System (ICRIS). You can also ask the local embassy network for support. On request, they will do a company check (in Dutch) for you. This way, you can be sure that the Chinese company exists.

Quotation

In the quotation of your supplier you can check whether the correct products are used, the type of transport, and the insurance of the shipment. Also, make sure you agree on an Incoterm®. These are international delivery terms. Both parties then know who is responsible for arranging the transport, the costs associated with the transport, and who bears the risk of damage to or loss of the goods during this transport. Also, check the validity of the quotation and in which currency you have to pay.

Customs

Customs charges fees when importing goods from China. For the import of goods into the EU, you must submit an electronic import declaration to Dutch Customs. A customs broker can arrange this declaration for your company, especially if you have little or no experience with this. You need an EORI number (in Dutch) to declare goods to Dutch customs. EORI stands for 'Economic Operators Registration and Identification'. With this number, you exchange data with customs.

Import duties from China

When you import products from China, you usually pay import duties. The amount of these import duties depends on the commodity code or TARIC code of your product. Contact the Dutch Tax and Customs Administration and the European Commission to find out what the rates and commodity codes are when you import products from China.

VAT

When importing into the Netherlands, you pay Dutch VAT in addition to any import duties. When submitting your VAT return, you deduct the VAT paid as input tax. You do this in the same way as you do for purchases in the Netherlands. That is if you are entitled to a VAT deduction. If you regularly import and are entitled to VAT deduction, apply for an Article 23 permit (in Dutch) from the Dutch Tax and Customs Administration. With this permit, you do not pay any VAT at the time of import. In your VAT return, you state the VAT and deduct it again as input tax. In the end, you pay nothing on balance.

If Chinese suppliers have a VAT identification number in the Netherlands, they may charge Dutch VAT. They must then also submit a VAT return in the Netherlands. If you are entitled to a VAT deduction, you deduct the VAT paid to your Chinese supplier as input tax in your standard VAT return. On balance, you will then pay nothing.

Import documents

Which import documents you need depends on the product you are importing. An invoice, a transport document, and a packing slip are standard import documents. Additional documents are sometimes required for certain goods. For example, when it concerns goods that may pose a risk to safety, health, economy, and the environment (VGEM, in Dutch). Contact Dutch Customs or a customs broker in advance to find out which documents you need for importing products from China.

Product requirements and product liability

If you import products from a non-EU country such as China, European and national requirements and rules apply to these products. They must be safe and usable. As an importer, you are liable for injury or damage caused by a faulty product. When a product carries risks, consider taking out product liability insurance.

Import payments

Chinese suppliers prefer not to deliver on an invoice and often ask for a prepayment. With a prepayment, you run the risk that your supplier will not deliver the goods. You can use different payment methods. Ask your bank about the payment method and currency that best suits the transaction.

Scams and Fraud

Doing business with countries outside Europe involves risks. You would not be the first to encounter a scammer or fraudster. Pay as little in advance as possible, and try to negotiate another form of payment. For example, you pay 25% in advance, 25% upon shipment, and 50% upon delivery. Or you can work with a Letter of Credit. If a trade dispute does arise, you can ask the Dutch Embassy for advice.

Import statistics from China

Dutch entrepreneurs imported more goods from China in 2020 than ever before. The total amount came to 44.6 billion euros. The share of goods from China in the total number of imports has grown over the past 30 years from 0.5% in 1988 to 8.9% in 2018 (source: CBS). Many imported products are, for example, telecommunications equipment, electrical appliances, and clothing and accessories.

RVO has more information about trade between the Netherlands and China (in Dutch).