VAT (Value Added Tax) – Frequently Asked Questions

What is VAT?

VAT or Value Added Tax is a consumption tax paid on goods from overseas that are shipped to customers in the European Union.

Why does Proper Cloth charge VAT?

Proper Cloth is registered in the European Union (in France) with a VAT identification number. We are required to collect and pay a flat 20% on all products shipped to addresses in the EU. Our shipping provider, FedEx requires that we report the price of goods and collect VAT upfront in order to deliver our products direct to customers, hassle-free.

How do we charge VAT?

Proper Cloth applies a 20% VAT to all orders shipped to EU addresses. The 20% VAT is included in the product prices listed on the site, converted into your preferred currency. VAT on imported goods is essentially a tax that you, the customer, must pay on the total cost for you to buy the goods and get them into the EU. Thus, VAT tax is applied to the combined value of the goods purchased and their associated shipping fee.

Other companies don’t charge VAT, why is that?

Typically, many ecommerce companies (like Proper Cloth) will specially adjust the prices that show on each product page based on the viewer’s location to include the 20% VAT. Even though you may not see VAT added on to your total price as a separate line item, you can be sure that it is built into the base price of the goods.

Occasionally, other companies will falsely write on the commercial invoice that the products being sent are “samples” or have value of $0, or a value low enough to be considered “negligible” by the customs office. In these cases you may receive the goods directly to your home without having to pay any VAT. Misrepresenting this information is of course illegal and we are unable to do this.

More Information on VAT

Here are a few more resources we found that explain VAT simply and thoroughly.