VAT on exports to France

[finleydesign]

Sorry if this has been asked, I thought I found simple black and white answer but a bit confused and just need clarification

If I am selling products to France do I charge the VAT? and do they then claim back?

What confused me is I am quoting for a job, but another customer bought a number of items and paid the order in full which included the VAT, so would they be claiming back, or should I refund the VAT?

 

[japancool]

If I am selling products to France do I charge the VAT? and do they then claim back?

If you're VAT registered in France, yes (and you should be, as there is no threshold for VAT registration for distance sales).

If not, no.

 

[finleydesign]

If you're VAT registered in France

Ok thats news on me! VAT registered in France??

 

[japancool]

Ok thats news on me! VAT registered in France??

Yes. You're supposed to register in every country of the EU you export to, but I would say the vast majority of e-commerce sellers don't bother, and just let customs deal with it. However, there is a chance they won't let your orders through.

You can use the IOSS system to register in all of the EU countries at once.

 

[finleydesign]

Yes. You're supposed to register in every country of the EU you export to, but I would say the vast majority of e-commerce sellers don't bother, and just let customs deal with it. However, there is a chance they won't let your orders through.

You can use the IOSS system to register in all of the EU countries at once.

Hmm ok I honestly didn't know that, have only recently started to expand into EU, so when you say leave customer to it, as in they deal with their own VAT reclaim? and we charge as normal

 

[antropy]

Yes. You're supposed to register in every country of the EU you export to, but I would say the vast majority of e-commerce sellers don't bother, and just let customs deal with it. However, there is a chance they won't let your orders through.

You can use the IOSS system to register in all of the EU countries at once.

It's such a mess isn't it.

IMO there should be no taxes on imports/exports anywhere, it should be totally free trade.

Paul.

 

[finleydesign]

It's such a mess isn't it.

IMO there should be no taxes on imports/exports anywhere, it should be totally free trade.

Paul.

Yes, but what I'm wondering is, I have a few orders going through where the client has paid the VAT, so do I charge it and let them sort what ever they need to sort out their end??

 

[japancool]

Hmm ok I honestly didn't know that, have only recently started to expand into EU, so when you say leave customer to it, as in they deal with their own VAT reclaim? and we charge as normal

Customs, rather than customer.

I can't speak for France, but what happens in the UK is, if the package has a declared value of over £135, OR it is under £135 and the sender is not UK VAT registered, HMRC will raise a charge for import VAT and duty, which must be paid, generally before the package is released for delivery.

In practise, many packages under £150 will just slip through without a charge.

However, we've seen people on the forum say that Germany is turning back many parcels that come from non-registered companies. Spain sometimes charges VAT even if a valid IOSS declaration has been made. As antropy says, total mess, but it's happening to anyone selling into the EU, not just the UK.

 

[japancool]

Yes, but what I'm wondering is, I have a few orders going through where the client has paid the VAT, so do I charge it and let them sort what ever they need to sort out their end??

No. You should not charge VAT if you are not VAT-registered in the recipient country. Such sales fall outside the scope of UK VAT.

This is, of course, assuming you are UK VAT registered.

 

[japancool]

IMO there should be no taxes on imports/exports anywhere, it should be totally free trade.

That would really only work if domestic VAT was abolished - which I don't necessarily oppose!

 

[antropy]

That would really only work if domestic VAT was abolished - which I don't necessarily oppose!

Good point. I wouldn't oppose that either!

Paul.

 

[finleydesign]

Ok so to be clear, I am a UK company and VAT registered, the order was place online from France and the order included VAT, value is £2k

They have paid the total order in full including the VAT, good are going to be shipped next week

 

[antropy]

I can't speak for France, but what happens in the UK is, if the package has a declared value of over £135, OR it is under £135 and the sender is not UK VAT registered, HMRC will raise a charge for import VAT and duty, which must be paid, generally before the package is released for delivery.

In practise, many packages under £150 will just slip through without a charge.

I bought a 4k monitor once and shortly after it arrived I got a bill from Customs. I just thought "fair enough" and paid it.

So perhaps send without charging VAT and let the bureaucrats sort it out.

Paul.

 

[japancool]

Ok so to be clear, I am a UK company and VAT registered, the order was place online from France and the order included VAT, value is £2k

They have paid the total order in full including the VAT, good are going to be shipped next week

Are you selling through your own website, or through a marketplace?

 

[japancool]

I bought a 4k monitor once and shortly after it arrived I got a bill from Customs. I just thought "fair enough" and paid it.

So perhaps send without charging VAT and let the bureaucrats sort it out.

Paul.

Yeah, I imagine that's what the vast majority of worldwide sellers do. The EU are having a larf if they think sellers in China or wherever are going to bother with EU registration.

Mind you, we expect foreign sellers to do the same thing selling into the UK. I know of one Irish company that did it, but no one else. What are they going to do, send HMRC agents round to them?

 

[finleydesign]

I bought a 4k monitor once and shortly after it arrived I got a bill from Customs. I just thought "fair enough" and paid it.

So perhaps send without charging VAT and let the bureaucrats sort it out.

Paul.

But I've already charged the VAT around 2 weeks ago, so it's already charged and paid for in full, the client doesn't seem bothered

 

[japancool]

But I've already charged the VAT around 2 weeks ago, so it's already charged and paid for in full, the client doesn't seem bothered

He might be when he gets hit with customs charges when the package arrives. Customers often refuse deliveries when they realise they have to pay extra charges. I would contact him and make him aware that he might be charged by French customs.

 

[Mister B]

As others have said, he will almost certainly be stung with not only VAT, but duty as well. That is, unless, the goods were made here in the UK.

If you're sending them with a courier, you can ship them DDP which will make it easier for him, but also lumber you with the import charges.

 

[DontAsk]

I am not VAT registered anywhere except the UK, and have no intention to, and send everything zero rated by Royal Mail. I had one issue (not Germany) where they clearly failed to find the CN22/23 on parcel. I now affix them in a more obvious place and have zero issues. I suspect most issues are down to incorrect documentation or human error.

 

[SeanOF]

Yes. You're supposed to register in every country of the EU you export to, but I would say the vast majority of e-commerce sellers don't bother, and just let customs deal with it. However, there is a chance they won't let your orders through.

You can use the IOSS system to register in all of the EU countries at once.

I don't believe it is correct to say you're supposed to register for VAT in every country you export to.
My understanding is that you are required to register for VAT in every country you hold stock in. After months of agonising and procrastinating about how to do business in the EU post-Brexit, I'm reasonably confident my interpretation is correct.

To the OP's issue, he/she has a number of options if they continue to sell into the EU:

a) If items are below €150 in value then IOSS registration may be suitable. You collect the VAT relative to the country you're selling to and max returns to the IOSS who then divvy it up to each member state where you sold items/collect VAT

b) If Items are above €150 then IOSS won't work and you have three options that I can think of:
1) Sell at ex-VAT price but make your customers aware they will liable for taxes/duties when the items enter their country. Easy for you but it puts customers off.
2) Send the items DDP (Delivery Duty Paid) via DPD or DHL. This is expensive for you but the customer will not be bothered by customs duties or taxes when the goods arrive so good for them.
3) Register for VAT in one EU country (Germany is usually recommended), send items from the UK to there paying VAT on them as they enter the country and then sell them as normal but ship them from your location in Germany (we use Amazon Germany to hold stock, for example). As you sell them you are collecting VAT for the various EU countries they are sold to and this is paid via an OSS return (NB OSS is different to IOSS) done quarterly I believe.

In the case in point I think you leave this one as it is. You've just earned 20% more on your item and if the customer isn't that bothered then you've been lucky on this occasion. But, as I understand it, you have no reporting or VAT registration obligations in the EU. Should you wish to have a more consistent business with the EU then you probably need to work out a better solution. HTH.

 

[DefinitelyMaybeUK]

b) If Items are above €150 then IOSS won't work and you have three options that I can think of

There is a 4) if you're a Royal Mail account customer as you can send via their DPD service (to a limited range of countries admittedly and does include France for a very low flat rate fee), but the parcel must be less than 2Kg and within the usual size restrictions - orders over €150 are fine unlike IOSS. The service works well and France is easily within a week.

EDIT: Note. this service is only for B2C sales, as despite what RM currently says, the recipient i) won't be able to reclaim the VAT paid and ii) wouldn't want to pay it anyway (especially in France as all VAT registered businesses are now meant to be EORI registered as postponed VAT processing has now been implemented).

 

[JEREMY HAWKE]

) Send the items DDP (Delivery Duty Paid) via DPD or DHL. This is expensive for you but the customer will not be bothered by customs duties or taxes when the goods arrive so good for them.

This does bare you nore cost but if your still making a profit it could be your best route.

The saddest thing of all although this is a mess to many UK businesses are walking away from the EU when they could continue trading albeit with a lot more hassle

 

[SeanOF]

This does bare you nore cost but if your still making a profit it could be your best route.

The saddest thing of all although this is a mess to many UK businesses are walking away from the EU when they could continue trading albeit with a lot more hassle

Yup. As I keep telling people, none of this was on the side of a bus in 2016.