Compliance — EU
Apparel Import Duties and Landed Cost: A Sourcing Worksheet for European Brands
Published 8 November 2026 · DISTRICT 88 Team
The gap between a factory quote and your unit economics is filled by three things: duty, freight and financing of the inventory period. Brands that model landed cost per style quote suppliers better, price collections better, and stop being surprised at customs.
Duty: find your heading, not your feelings
Garments enter the EU under Chapter 61 (knitted) or Chapter 62 (woven) of the Combined Nomenclature, with rates that vary by composition, construction and garment type — commonly in the range of around 12% on many cotton knit articles, with variations by heading. Classification is style-specific: a knitted hooded sweatshirt and a woven jacket do not share a rate, and misclassification is a customs risk, not a rounding error.
Your checklist: for each style, confirm the HS/CN code, the duty rate, and whether any preference applies to the origin. With production in China under standard terms, plan for the full third-country duty — the Incoterm does not change the duty, only who organizes clearance.
The landed-cost line items
Per style, model:
- —FOB unit price (or EXW/CIF/DDP — keep one Incoterm for comparability).
- —Ocean freight allocated per unit (container utilization is the hidden variable), or express air where the calendar demands it.
- —Duty: rate × customs value (transaction value basis), plus any brokerage fees.
- —Import VAT (recoverable for VAT-registered businesses — model cash flow, not just cost).
- —Inland transport to your warehouse, and QC/testing costs if third-party.
DDP vs FOB: who handles what
Under FOB, your forwarder handles EU import clearance; you control the broker relationship and the duty/VAT flows. Under DDP, the export side organizes door-to-door delivery with clearance included — operationally lighter, priced accordingly. Both are legitimate; the mistake is comparing an FOB quote to a DDP quote as if they were the same thing.
A worked structure you can reuse
One row per style: FOB price, units, freight per unit at your container fill, duty % × customs value, VAT note (recoverable), inland per unit, QC per unit. Sum it, divide by sellable units after your reject allowance, and you have the number your pricing should be built on. Re-run it when freight or quantity changes — landed cost is a living model, not a one-time calculation.
Frequently asked
What is the typical EU import duty on garments from China?
It depends on the heading: many cotton knit garments fall around 12%, but the rate varies by composition and construction. Confirm the CN code per style with your broker before costing.
Do I pay duty on the FOB price or another value?
Duty applies to the customs value, generally the transaction value (price actually paid or payable, with adjustments) — your broker confirms the basis per shipment.
Is import VAT a cost?
For VAT-registered EU businesses, import VAT is generally recoverable — it is a cash-flow item, not a final cost. Model it separately from duty, which is definitive.
We quote under the Incoterm you choose — FOB, CIF or DDP with EU clearance — so your landed model stays honest.
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