Question 1

What is landed cost?

Accepted Answer

Landed cost is the total cost of getting a product from your supplier to your warehouse. It includes the product price, shipping, insurance, customs duties, import VAT, and any handling or brokerage fees incurred along the way.

Question 2

How is import VAT calculated on EU imports?

Accepted Answer

Import VAT is calculated on the CIF value (product cost + freight + insurance) plus customs duty. For example, at 21% Dutch VAT: (€5,829 CIF + €245 duty) × 21% = €1,276. VAT-registered businesses can typically reclaim this as input tax.

Question 3

Can I reclaim import VAT?

Accepted Answer

Yes, if you are VAT-registered in the destination country. Import VAT is treated as input VAT and can be deducted on your VAT return. Some countries offer deferral schemes such as Netherlands Article 23 or UK Postponed VAT Accounting.

Question 4

What is the difference between CIF value and landed cost?

Accepted Answer

CIF (Cost, Insurance, Freight) is the customs value used to calculate duty and VAT. Landed cost includes CIF plus all duties, taxes, brokerage, handling, and local delivery — the true total cost to get goods to your warehouse.

Question 5

How do I find my customs duty rate?

Accepted Answer

Use CARVO’s free EU Import Duty Calculator to look up the duty rate for your product’s HS code. You can also check the EU TARIC database or ask your customs broker.

Question 6

Why is my landed cost much higher than the product price?

Accepted Answer

Freight, duty, and VAT compound on top of each other. A typical EU import adds 30–60% to the product cost. VAT is usually the largest component but is reclaimable for VAT-registered businesses.

Question 7

How do Incoterms affect landed cost?

Accepted Answer

Incoterms determine which costs the seller vs buyer pays. Under EXW, the buyer pays everything from the factory. Under DDP, the seller covers all costs including duties. The total cost is similar — the question is who bears each component.

Question 8

Should I include VAT in my landed cost calculation?

Accepted Answer

Include it for cash flow planning since you pay it upfront at import. For margin calculations, exclude it if you are VAT-registered because you will reclaim it. This calculator shows both the total with VAT and the margin impact.