Importing from EU and VAT?

[Moonhawk]

VAT is usually only payable if you buy goods within a country (i.e. if you buy goods in the UK and are UK resident - you pay UK VAT, same with Germany etc).

I want to buy an item from Germany. This website suggests that if the goods are being exported outside the EU, then German VAT is not payable (I assume this is similar to the system operated in the UK via the "tax free shopping scheme")

https://www.vat-germany.com/vat-registration/expor...

I would of course be hit for UK import duty and VAT from UK customs as soon as the item reaches the UK.

The German retailer however (like many UK retailers), sells the goods on their website at a price which includes German VAT. If I purchase at that price and then get hit for UK import duty and VAT - I will have effectively paid VAT twice.

Does anyone know how this works in practice. Is there a way to reclaim German VAT after the import has concluded - or should I ask the German retailer to invoice me at net price that excludes German VAT given my shipping address is clearly outside the EU?

I have looked at the HMRC website - however that mostly talks about VAT registered UK businesses - not individuals.

Thanks

[N8CYL]

Hi, you can't reclaim German VAT on the goods They need to sell excluding VAT. UK VAT is then payable in the UK and collected prior to delivery to you. Duty is only payable if there is any.

[monkfish1]

As above, they should sell it to you ex VAT.

If they wont, theres not much you can do about it. Theres no mechanisim for recovering it.

Find someone who will sell ex VAT

I really dont know why business make it so hard. In my business we have always done. Its not difficult.

[Moonhawk]

Cheers - i'll contact them and see if they can invoice ex-VAT.

[Eric Mc]

Are you a business or an ordinary individual?

[Moonhawk]

Eric Mc said:

Are you a business or an ordinary individual?

Private individual.

I messaged the vendor - and they have sent the following reply:

"We send to countries outside the European Union have the IOSS No., that is, we will bear the import value-added tax, and customers do not need to bear it."

However I looked up what an IOSS number is, and all the information I have been able to find discusses transactions where the value of goods are under £135 (150 euro). The item I would like to order is closer to £500.

https://www.vat-digital.com/import-one-stop-shop-i...

You cannot use the IOSS scheme for shipments over 150 euros. Additional charges such as customs duties may also be payable on items that are above this new threshold. You will need to ship items over 150 euros DAP or DDP (see further down for more information about these).

What is DAP?
This stands for Delivery At Place. For goods shipped under DAP, you do not need to charge sales VAT on the transactions and you will not be charged import VAT. Instead, your customer will have to pay the import VAT and any other customs duties, fees etc before the goods are released from customs on arrival.

What is DDP?
This stands for Delivery Duty Paid. For goods shipped under DDP, you should charge sales VAT on the transaction. You will need a VAT registration in the arrival country to report the sales VAT to the tax authority in the relevant country. Under DDP, you (the seller) will be charged import VAT. This can be offset against the sales VAT due as long as you have the correct paperwork to prove this. In some cases, it may be possible to apply for deferred import VAT schemes. Please contact us if you need more information about this as the rules vary from country to country.

Edited by Moonhawk on Wednesday 15th March 11:34

[Eric Mc]

Is the reply you quote word for word correct or have you left some words out? It's a bit garbage from an English point of view.

However, here's a link to some explanations from accountants BDO -

https://www.bdo.co.uk/en-gb/insights/brexit/new-ru...

The joys of Brexit.

[RicksAlfas]

The EU VAT rules were always changing from July 2021 whether Brexit happened or not.

They were created because the EU were having a big problem with online sales not paying VAT in the country where the purchase was made.

https://ec.europa.eu/commission/presscorner/detail...

[Moonhawk]

Yes - their reply is verbatim.

Looking at your link - it all seems to depend on whether the EU company I am buying from is also registered for UK VAT.

If they are registered for UK VAT - they can charge local VAT at the point of sale and I will only be charged import duty on import to the UK (UK customs will cross charge the import VAT against the sale VAT)

If they are not registered for UK VAT - they should zero rate the sale, and I will pay both UK import duty and UK VAT on import to the UK.

[RedWhiteMonkey]

Unless you are absolutely desperate for the goods I wouldn't bother. We import from Germany to the UK and UK customs appear to have no idea what the rules are. Sometimes things go through without any issue, sometimes they stop them, sometimes they add a charge, sometimes they don't. This is all for identical value orders to one customer over the course of the last year or so. UK customs are useless, they seem to decide on what rule to apply on a totally random basis. It drives our UK customer mad.

[Moonhawk]

RedWhiteMonkey said:

Unless you are absolutely desperate for the goods I wouldn't bother. We import from Germany to the UK and UK customs appear to have no idea what the rules are. Sometimes things go through without any issue, sometimes they stop them, sometimes they add a charge, sometimes they don't. This is all for identical value orders to one customer over the course of the last year or so. UK customs are useless, they seem to decide on what rule to apply on a totally random basis. It drives our UK customer mad.

Hmm - doesn't sound good.

If I can get the vendor to zero rate the sale - then I would expect to pay the import duty and VAT when it get's stopped at UK customs, which is fine as it'll be a one off purchase. It's the potential for paying double VAT that is worrying me.

Edited by Moonhawk on Wednesday 15th March 12:04

[Eric Mc]

RicksAlfas said:

The EU VAT rules were always changing from July 2021 whether Brexit happened or not.

They were created because the EU were having a big problem with online sales not paying VAT in the country where the purchase was made.

https://ec.europa.eu/commission/presscorner/detail...

Intra EEC/EU VAT were not ALWAYS changing. There were about three fundamental points from 1973 where some big changes happened - the biggest being the introduction of the single market in 1993 (championed by the UK and Mrs Thatcher, don't forget).
Most VAT changes happen at a national level.

Obviously, leaving the EU means that VAT for UK citizens and business is a lot messier and complicated than it was. There is no argument about that.

[OutInTheShed]

Eric Mc said:

Intra EEC/EU VAT were not ALWAYS changing. There were about three fundamental points from 1973 where some big changes happened - the biggest being the introduction of the single market in 1993 (championed by the UK and Mrs Thatcher, don't forget).
Most VAT changes happen at a national level.

Obviously, leaving the EU means that VAT for UK citizens and business is a lot messier and complicated than it was. There is no argument about that.

VATMOSS was introduced in 2015 or 2016 before the referendum.
Initially for digital products.

[Eric Mc]

I didn't say there were no changes - just not that many fundamental ones. Most VAT changes came from the UK government.

[N8CYL]

If the supplier is willing to sell exc VAT, which they most definitely can, then its all straight forward. The courier collecting and delivering will complete the import for you, on your behalf, and ask for the VAT and any duty if any. The duty, if any, will be a tiny amount. VAT is VAT.