Import costs from China: the complete breakdown

1. Total outlay and cost excluding recoverable VAT

To compare suppliers, calculate the total outlay through to your warehouse. This includes VAT advanced; treat it as recoverable only if your business meets the deduction requirements and holds the import document.

• Total outlay = factory price + international freight + insurance + duties + import VAT + clearance and handling.
• Two quotes with the same unit price can differ significantly in total outlay — in some operations by around 20-30% — due to Incoterm, packaging or real volume.
• As an indicative reference, always budget with a contingency margin (for example 5-10%) for delays, extra inspections or freight fluctuations; the right margin depends on the product, the route and the freight market.

2. Factory price and Incoterms

The price you negotiate with the factory depends on the Incoterm: an EXW price (ex works) is not comparable with FOB (on board) or CIF (freight and insurance included).

• EXW: you take on all transport from the factory gate, including loading and export clearance in China.
• FOB: the factory delivers the goods on board the vessel; it is the most common Incoterm and the most comparable across quotes.
• CIF: includes freight and insurance to the destination port, but destination charges (THC, clearance) remain yours.
• Always request quotes on the same Incoterm so you can actually compare them.

3. International freight and insurance

Ocean freight is the most volatile cost component: it can multiply in tight markets. Quote it when closing each operation, not from historical averages.

• Full container (FCL) or groupage (LCL): LCL raises the cost per cubic metre and adds handling.
• On top of freight there are local charges at origin and destination: THC, documentation, handling and delivery.
• Cargo insurance usually costs a small fraction of the goods' value and covers damage and loss: do not skip it.
• Air freight multiplies the cost, but can make sense for samples, launches or high-value goods.

4. Duties and import VAT

At Spanish customs two taxes are settled: the duty, which depends on the product's TARIC code, and import VAT, whose general rate is 21%.

• Duty is applied on the customs value (roughly the CIF value) and varies by product: from 0% to over 10%.
• Some products of Chinese origin carry additional antidumping duties: verify this before closing the price.
• Import VAT is calculated on the customs value (which already includes freight and insurance to the EU point of entry) + duty and other import charges + incidental costs not yet included up to the first place of destination in the Member State of importation; it may be deductible for businesses with the right to deduct that meet the formal requirements.
• Subject to certain requirements, Spain's import VAT deferral scheme lets you declare it in the monthly return instead of advancing it at customs; in practice it requires filing VAT monthly, so not every company can apply it.

• AEAT — VAT deduction requirements (Spanish)
• AEAT — Documents required for deduction (Spanish)
• AEAT — Import VAT: how to defer payment (Spanish)

5. The hidden costs nobody budgets for

The difference between a profitable import and a loss usually lies in the costs that do not appear in the first spreadsheet.

• Laboratory tests, certificates and adapting labelling to European regulations.
• Factory quality inspections: a small cost that prevents very large losses.
• Demurrage and port storage if documents arrive late or customs selects the shipment for inspection.
• Returns, replacements and commercial discounts if the product arrives with defects.
• Financial cost: the factory deposit and advanced VAT tie up cash for weeks.

6. A worked example and how to calculate it

A simplified example, not a quotation: for a typical operation — one container of medium-value goods — the breakdown may look roughly like this, although it varies significantly by product, volume, density, origin, destination, Incoterm and freight market:

• Factory price (FOB): around 60-75% of the total outlay.
• Freight, insurance and local charges: around 10-20%, depending on market and volume.
• Duty: according to TARIC; at a 4% rate, roughly 2-3% of the total outlay.
• Import VAT (21%): part of the outlay and potentially deductible if the business meets the requirements and holds the import document.
• Clearance, inspections and handling: the remaining 3-8%. This combined estimate groups third-party costs (customs broker, inspections, operational handling) and does not represent EC HolaHome's fees, which are agreed according to the scope of each project.
• Actual amounts depend on the tariff classification, customs value, transport, Incoterm, origin, destination and the charges applicable to each operation.