DCA UPDATE WEB VERSION: Click Here
There are a number of opt ions depending on the type of customer and the value of orders being shipped. MHI offers an opt imised approach that involves clearance and prepayment of taxes in NL (DDP- Delivered Dut ies Paid) for those items that reach the 22 euros threshold for import VAT. Items are processed and prepared for final mile delivery at our Bristol Hub, then shipped over in bulk but cleared on a line by line basis (individual parcels). We are seeing clients registering for VAT in NL and treat ing this as a “stock movement” clearance with a view to reclaiming the VAT, we encourage clients to consult their Tax advisors to establish if this is the best solut ion for them. For items below the 22 euro threshold that currently do not attract import VAT we can send DAP (Delivered At Place) therefore avoiding clearance fees to be paid. The 22 euro de minimis will disappear from July 1st so DDP becomes the preferable opt ion for those retailers want ing to avoid customers being charged on delivery. Jeremy Parnham, MH-International
return processes as well as making customs declarations and paying any tariffs due. These are functions which freight forwarders can assist with and many have established teams dedicated to smoothing processes. If you are importing into the EU, you need to a resident business with an EORI for certain Customs issues, including the declarations. You may also find that you require an import customs representative.
This works far better for your EU customers but you will bear the cost of customs and VAT compliance. There are deferred import VAT schemes operating in most EU countries which can help..
C: Your EU customer clears with you paying import VAT plus any tariffs
You can make your customer the importer but you pay any customs and import VAT via the freight forwarder. This is often referred to as ‘DDP with agent’ or ‘Buyers Agent’.
This brings the good experience of B – taking the worry of VAT or tariffs from your customer. You don’t have to be VAT registered and
accounting in each country doing filings. But you will need a Power of Attorney from your seller, which adds to the checkout process time. Ensuring you receive the VAT you’ve paid, by passing it to the customer at the point of checkout is complicated and will need to be automated.
D: Store cleared bulk goods within the EU
This requires that you ship and clear best- selling lines in the EU and fulfil all EU orders from this warehouse. Amazon has already insisted on this.
The major issue here is the cost of having stock tied up in an additional location. But once you do this, you can avoid individual customs declarations for each order. VAT registration will be needed for the country in which you store the stock. Further VAT registrations may be needed if you are making significant sales in other EU countries. Import VAT can be managed with via Postponed Accounting.
The Netherlands and Belgium currently offer good VAT schemes as well as good transport links. You don’t have to pay import VAT in either
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and many freight forwarders are offering comprehensive support packages.
Alternatively if importing into France by ferry; or EuroTunnel you can then onward ship the goods to another EU country before you clear them for import VAT and customs. This option tends to create more paperwork and means the VAT treatment is less favourable and could mean that you will pay import VAT.
E: Wholesale your products to EU merchants
If the administrative and prospective cash f low demands are too great for your business at this time, consider working with an established merchant in the EU countries where you have built up a ‘following’. By selling as a wholesaler to merchants you will, of course reduce your gross margin whilst reducing your risk and may well find that sales grow.
This information gathered from multiple sources and we thank Avalara, in particular, for its advice on VAT issues.
For more on these matters please click here.
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