After Brexit, Customs Duty, VAT, and Other Fees Apply When Importing Cars and Goods from the UK
In this post, you will find answers to important questions about customs duty and VAT for importing cars and other goods from the UK to Bulgaria after Brexit.
Customs clearance for cars imported from the UK to Bulgaria involves several steps and calculations related to customs duty, VAT, and other fees. The process and calculation method may vary depending on the type of vehicle, its value, and age. Here’s what you need to know:
Customs Duty (Import Duty)
- Customs duty depends on the vehicle’s value and origin. For cars imported from the UK, the duty is typically 10% of the vehicle’s invoice value.
- The duty is calculated based on the agreed vehicle price (the price you purchased it for) plus transport costs to Bulgaria.
Formula:
Duty = (Invoice Value + Transport Costs) × 10%
VAT (Value Added Tax)
- In Bulgaria, the standard VAT rate is 20% and applies to the vehicle’s value, transport costs, and customs duty.
Formula:
VAT = [(Invoice Value + Transport Costs) + Duty] × 20%
Customs Clearance
- This is the fee for processing documents by customs authorities. This fee may vary but is usually a fixed amount or a percentage of the total import value.
- For passenger cars, this fee can be a few hundred BGN.
Additional Fees
- Eco Tax: Depending on the vehicle’s environmental characteristics, an eco tax may be required.
- Technical Inspection and Registration: The vehicle must pass a technical inspection and be registered with the Traffic Police after arrival.
Example Calculation:
Invoice Value of the Vehicle: 10,000 BGN
Transport Costs: 1,000 BGN
Customs Duty (10%): (10,000 BGN + 1,000 BGN) × 10% = 1,100 BGN
VAT (20%): [(10,000 BGN + 1,000 BGN) + 1,100 BGN] × 20% = 2,420 BGN
Total Amount (Including Duty and VAT): 10,000 BGN + 1,000 BGN + 1,100 BGN + 2,420 BGN = 14,520 BGN
This is the basic process for calculating customs duty and VAT when importing cars and goods from the UK. Additional fees related to transport, registration, and environmental standards may also apply.
Can Customs Duty and VAT Be Avoided When Importing from the UK?
Avoiding the payment of customs duty, VAT, and clearance fees for importing cars from the UK to Bulgaria is illegal. Customs authorities in every country, including Bulgaria, have strict rules and control over imported goods, including vehicles. Attempts to evade these charges can lead to severe penalties, including fines, vehicle confiscation, and even criminal liability.
Possible Legal Ways to Reduce Costs:
Importing Vehicles Over 30 Years Old (Classic Cars)
Classic cars over 30 years old are often classified as collector’s items and may qualify for reduced duty or VAT rates, depending on the case.
Temporary Use
If the vehicle is registered in another country and used temporarily in Bulgaria, it may be exempt from some fees. It is important to comply with time limits and usage conditions.
Purchasing from EU Countries
If the vehicle has already undergone customs clearance and VAT payment in another EU country (before Brexit, this applied to UK vehicles), customs duty does not need to be paid again when importing it into Bulgaria.
However, after Brexit, the UK is no longer part of the EU, meaning that customs duty and VAT now apply to vehicles imported from there.
Diplomatic Status or Special Regimes
Individuals with diplomatic status or those eligible for specific tax exemptions may be exempt from customs duty and VAT, but such cases are rare and highly specific.
Negotiating a Lower Invoice Value with the Seller
Some people attempt to declare a lower invoice value for the vehicle to reduce customs duty and VAT, but this is illegal and can lead to serious consequences if customs authorities find discrepancies between the actual and declared value.
What Are the Consequences of Attempting to Evade Fees?
- Fines: If customs authorities detect incorrect or falsified documents, high fines may be imposed.
- Confiscation: The vehicle may be confiscated.
- Criminal Consequences: In serious cases, legal action may be taken.
Therefore, it is best to comply with legal requirements and explore ways to reduce costs through legitimate means.