UK to EU-VAT-Registered-Customer Shipments

Discussion in 'International Business' started by Jack O, Jan 12, 2021.

  1. Jack O

    Jack O UKBF Newcomer Free Member

    6 0
    We are based the United Kingdom.
    Our products are made in the United Kingdom.
    We have a Customer in Germany who is VAT registered.
    We have the Customer's DE VAT number.
    We have a GB VAT Number and a GB EORI Number for export.
    We send on the normal EXW / DDU service.
    We use DHL.

    Will the Customer be charged VAT?

    Besides changing to a DDP service, is there anything I can change above, so the business-Customer does not pay anything upon arrival?

    i.e does registering for an EU EORI number solve my question?
    Last edited: Jan 12, 2021
    Posted: Jan 12, 2021 By: Jack O Member since: May 13, 2020
  2. Red Wood

    Red Wood UKBF Regular Free Member

    647 74
    The UK is a 3rd country, so imports INTO the EU will have vat due if it is a vat qualifying product in your customers country.

    Your customer will claim it back on their return just as they would normally.
    Posted: Jan 12, 2021 By: Red Wood Member since: Jan 14, 2014
  3. 2JP

    2JP UKBF Contributor Free Member

    96 8
    As I understand it:

    You mention two incoterms that are very different.

    DDP incoterm implies that you, as supplier, will pay all fees related to the import into EU and be the named importer. You would need to have an EU EORI and possibly representation in the EU country and possibly register for VAT in the EU country.

    With EXW, your customer would, as well as being the declarant for import into the EU, also be declarant for export from GB (they would need GB EORI and possibly GB VAT registration).

    DAP (DDU) is often the sensible option as you act as exporter (GB EORI, zero rate VAT) and your customer is the importer (EU EORI / DE VAT). They will have to pay VAT and import fees (etc) or defer it in some way depending on their local arrangements with their EU tax office. They are an EU VAT registered business, and so will be able to reclaim any VAT paid.

    To me, DAP seems a good way for businesses to interact. The supplier takes care of export from their country, and the customer takes care of import in their country. Neither needs to be registered in each other's countries (not always true but not the scope to expand here, even if I had it all in my head, which I don't).

    The hassle for your customer to act as importer or the hassle for you to register in the customer's country and act in whatever way an importer is supposed to act and be represented there, according to their rules, is exactly what Brexit means.

    As I understand it.
    Posted: Jan 12, 2021 By: 2JP Member since: Dec 10, 2017