Import VAT and GST on Clothing: How It Is Calculated in the UK, Germany, Canada and Australia, and How You Get It Back

Yes. Adult clothing imported into the UK carries import VAT at the standard rate of 20%, even though Bangladesh-made garments pay no duty under the Developing Countries Trading Scheme. HMRC works the tax out on the VAT value: the customs value, plus transport, insurance and other incidental costs up to the goods' first destination in the UK, plus any duty. With duty at zero, 500 tees worth US$3,000 with US$500 of freight and insurance give a VAT value of US$3,500 and import VAT of US$700. Young children's clothing that meets HMRC's conditions is zero-rated, so check that before you price a kidswear range. Registered? The US$700 is input tax; under postponed VAT accounting, with the entry in your name, it nets to zero for a fully taxable business, because you declare and reclaim it on one return. For imports into Great Britain, the importer of record needs an EORI number starting with GB. Unregistered, the US$700 stays a cost in your landed price.

Yes, if you are registered for VAT or GST and the goods were entered in your company's name: the tax paid at the border is input tax, reclaimed on your return. In the UK, postponed VAT accounting lets most registered importers declare and reclaim it on the same return, so nothing is paid at the port. Germany and the other EU member states recover it through the normal VAT return of the member state where you are registered and the goods are cleared, and Canadian GST comes back as an input tax credit. In Australia, the deferred GST scheme lets eligible monthly filers pay it on the first activity statement after import. It does not come back in two common cases: an unregistered business, for which it is a true cost, and an entry filed in a forwarder's name, which leaves the tax off your return. On a US$30,000 UK order the VAT is at least US$6,000, more once freight is in the base.

In the UK, the EU and Australia, yes; in Canada, no; and the United States charges no import VAT at all. The UK customs value already includes freight and insurance to the border, and HMRC adds any further costs to the goods' first destination before working out the 20%. EU member states, Germany included, charge import VAT on the customs value plus duty plus transport and insurance to the first place of destination. Australia's 10% GST also counts international transport and insurance in its base. Canada is the exception: its 5% GST is charged on the value for duty plus duty, and the value for duty leaves international freight out. On 500 tees worth US$3,000 with US$500 of freight and insurance, the import tax is therefore US$700 in the UK, US$665 in Germany, US$350 in Australia and US$150 in Canada. Check which base a quote uses before you compare two suppliers' landed prices.

No. DDP moves the paperwork and the payment to the seller, but import VAT or GST is still charged on the importation. Some suppliers put it inside the DDP price and some quote duty paid with the tax excluded, so ask which you are being offered before you compare two DDP prices. The more important question is whose name the customs entry is filed in. If it is your company's, you are the importer and, if registered, you can recover the VAT or GST on your return. If it is the forwarder's, the tax has been paid but it is not on your return, so you cannot reclaim it. In the UK, a VAT-registered buyer whose company is named on the entry can agree postponed VAT accounting with us in writing, so nothing is paid at the border. Tell us which arrangement you need before the goods move, because it decides how the entry is filed.

At 10% of the value of the taxable importation, which adds three things together: the customs value, the cost of international transport and insurance to Australia, and any duty. Bangladesh-made clothing enters at the LDC rate of Free under the Customs Tariff Act 1995, so duty adds nothing to that base. On 500 tees with a customs value of US$3,000 and US$500 of freight and insurance, the taxable value is US$3,500 and the GST is US$350. Leaving freight out would understate it by US$50 on this order, so add the freight line before you work out the tax. A registered importer can claim the GST back. Eligible monthly filers can also use the deferred GST scheme, which moves the payment from the border to the first activity statement after import and narrows the cash-flow gap between the border and the refund. For an unregistered business, the US$350 is a real cost that belongs in the landed price.

No. The United States has no federal VAT or GST, so no import tax is collected when clothing clears US customs. What a US importer pays at the border is mainly duty, plus the small Merchandise Processing Fee and, on sea freight, the Harbor Maintenance Fee. For Bangladesh-made cotton t-shirts and sweatshirts (HTS 6109.10 and 6110.20), the duty is the MFN rate of 16.5% plus the 10% Section 301 duty applied from 24 July 2026, 26.5% in all. The IEEPA reciprocal tariffs ended on 20 February 2026. On 500 tees with a customs value of US$3,000, that is US$795 of duty. Unlike import VAT, duty does not come back on a tax return, so it belongs in your unit cost. State sales tax is charged when you sell to a customer, not when you import. That is why this page's worked example gives the US duty and no import tax, while the other four markets show a tax and zero duty.

Usually yes if you buy it, but in Great Britain not as import VAT at the border. A consignment worth £135 or less, sold from outside the UK directly to a customer there, not through an online marketplace, carries UK supply VAT charged by the seller at the point of sale. The limit is per consignment, not per item. A VAT-registered business buyer giving its UK VAT number is not charged; it accounts for the VAT by reverse charge, normally recovering it on the same return. Parcels into Northern Ireland are charged import VAT instead, and gifts fall outside these rules. Samples a UK business imports solely to win future orders, marked or defaced as samples before import, can qualify for separate relief from import duty and VAT. The government plans to end the £135 customs duty relief by October 2028 at the latest and is still considering how VAT will then be collected. Last verified: 23 September 2026.

In the UK and Australia, yes, but registration decides whether the tax comes back. GOV.UK says every importer needs an EORI number, and postponed VAT accounting is open only to VAT-registered businesses, so an unregistered importer pays the 20% when the goods arrive and cannot reclaim it. The ATO says GST on a taxable importation is payable whether or not you are registered, and only a registered business can claim it as a GST credit or use the deferred GST scheme. In Canada, input tax credits are claimed by GST/HST registrants, so the 5% stays with an importer who is not registered. In the EU, check the rules of the member state where the goods clear. If you are not registered, the tax is part of your landed cost rather than a cash-flow gap. Your accountant can say whether registering early pays off, since it also means charging the tax on your own sales.