Tariff vs. VAT: what's the difference?

When a package clears customs, you can be charged more than one thing at once. It's easy to see a single "customs fee" line item and assume it's all one charge, but a tariff and VAT (or sales tax) are collected for different reasons and calculated differently.

Tariff (import duty)

A tariff is a charge specific to importing a good from another country. It exists to protect domestic industry, generate government revenue, or as leverage in trade policy. The rate depends on what the product is (its HS code) and often where it came from (its country of origin) — that's why the same product can face different tariff rates depending on origin country.

VAT / sales tax

VAT (or a local sales tax) is a general consumption tax applied to goods and services regardless of whether they were imported or made domestically. On an import, it's usually calculated on the total landed cost — product value, shipping, and the tariff already added — which is why VAT can appear to "stack" on top of the tariff rather than apply separately to it.

Why this matters for your total cost

If you only budget for the tariff rate, you can underestimate the total landed cost of an import by a meaningful margin, since VAT is often calculated after duty is added. When estimating cost, check whether your destination country applies VAT on imports and whether it's calculated on the pre-duty or post-duty value.

The tariff calculator on this site estimates the duty portion only — it does not calculate VAT or sales tax.