Importing goods from France

[startuptrader]

I usually get all my own products manufactured in China through a sourcing company, so everything including the shipping, clearance and VAT is done through them.

I have found another supplier for a new line of products in France. The products are manufactured in China, however the distributor in France is obviously ordering huge quantities and therefore offering a resale price of less than I can buy for.

They obviously pay their VAT equivalent when importing into the EU and will be charging me their VAT.

So my question is do I still need to pay VAT when buying from them?
Also i think they just load it onto pallets and ship direct to me. Where will customs come in and how would I do the paperwork to clear this?

Thanks in advance!

 

[Frankngai]

Sorry. Maybe I can't answer your question. But I am so surprised that the price from your French supplier is lower than that from China. May I know what kind of product you are talking about?

B. rgds,
Frank

 

[startuptrader]

Sorry. Maybe I can't answer your question. But I am so surprised that the price from your French supplier is lower than that from China. May I know what kind of product you are talking about?

B. rgds,
Frank

The French supplier uses the same factory but their lines are endless.
We manufacture 3 lines and order 500 or so a time. The French suppliers order 1500 of each line a time. The prices they get from the factory are better and they can pass on those discounts.
We can't really afford to manufacture the other lines they get manufactured so it is cheaper and easier to order through them.

 

[chrisbarnes86]

You can ask them to put your VAT number on the invoice which will allow them to zero rate it. Then you will need to declare this on your VAT return.

There is no customs involvement between EU countries so you will not need any paperwork or have to pay any taxes.

 

[startuptrader]

You can ask them to put your VAT number on the invoice which will allow them to zero rate it. Then you will need to declare this on your VAT return.

There is no customs involvement between EU countries so you will not need any paperwork or have to pay any taxes.

Unfortunately we are not VAT registered... Will that have any effect?

 

[GraemeL]

I usually get all my own products manufactured in China through a sourcing company, so everything including the shipping, clearance and VAT is done through them.

Hello Sam,

Good luck with French supplier. It can work, so long as they are not also directly competing with you.

Your real problem may be the way you are buying. It sounds like you really have no idea how much the ex factory price is, nor how much your sourcing company is making from all theses add on's.

If I were you, I would ask someone (such as Frankngai) to get an FOB price for you for the product. Then you have the evidence to make a good decision, which you don't have now.

G

 

[GraemeL]

Unfortunately we are not VAT registered... Will that have any effect?

Yes.

If you are not VAT registered, the French supplier will charge you VAT.

G

 

[GraemeL]

There is no customs involvement between EU countries so you will not need any paperwork

Not quite right, EC sales list is required.

G

 

[startuptrader]

Hello Sam,

Good luck with French supplier. It can work, so long as they are not also directly competing with you.

Your real problem may be the way you are buying. It sounds like you really have no idea how much the ex factory price is, nor how much your sourcing company is making from all theses add on's.

If I were you, I would ask someone (such as Frankngai) to get an FOB price for you for the product. Then you have the evidence to make a good decision, which you don't have now.

G

Thanks for your reply.
The French company deal with mainland Europe, they have no outlet at all in the UK. There will be no direct competition for the UK market.

I am fully aware what we pay for the sourcing from China. We get a break down with unit base price, sourcing fee, VAT, shipping etc...
The factory will just not entertain the numbers we want at prices that will make our products competitive. For instance the MOQ on some decorative products is 500 units. I only want 100 units, to do this the factory want a further $1.29 USD

Yes.

If you are not VAT registered, the French supplier will charge you VAT.

G

So if I was VAT registered they wouldnt charge me, but because I'm not they will.
As far as I am aware the prices include the French VAT of 19.6% anyway.

Not quite right, EC sales list is required.

G

Could you elaborate on this please? What is an EC sales list and how does the supplier provide this?

 

[GraemeL]

So if I was VAT registered they wouldnt charge me, but because I'm not they will.
As far as I am aware the prices include the French VAT of 19.6% anyway.

Correct, but if you were VAT registered you would have to report the purchase on your VAT return and in effect 'pay' it. For EU imports VAT is paid, either in reality if you are not VAT registered, or notionally if you are.

The EC sales list is here:-
http://www.hmrc.gov.uk/vat/managing/international/esl/submit-esl.htm

But I realise I am being silly. This is if you are selling to an EU country, not buying from it. Sorry!

Is the information on MOQ etc coming through your sourcing company?

G

 

[startuptrader]

Correct, but if you were VAT registered you would have to report the purchase on your VAT return and in effect 'pay' it. For EU imports VAT is paid, either in reality if you are not VAT registered, or notionally if you are.

The EC sales list is here:-
http://www.hmrc.gov.uk/vat/managing/international/esl/submit-esl.htm

But I realise I am being silly. This is if you are selling to an EU country, not buying from it. Sorry!

Is the information on MOQ etc coming through your sourcing company?

G

Okay, that makes sense. Thanks!

The negotiation with the factory is done ourselves, once we have done this we pass it to our sourcing company to do the shipping and clearances.

 

[chrisbarnes86]

Not quite right, EC sales list is required.

G

That doesn't restrict movement of goods though.