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Posted Tue, 26 Sep 2023 12:39:45 GMT by Mendelsohnf
I hope someone can help with our conundrum. We have a client based in the UAE who paid us for a product that a factory in Germany has produced for us on the client's behalf. The client paid us more than what it cost the factory to produce. This excess is our commission. The factory in Germany will ship the goods to the UAE. The problem is that the commercial invoice from Germany will not match what the client paid. My question is, can we produce a commercial invoice in the UK for goods that are in Germany and due to be shipped from there to the UAE? Can we forward this on to the client and the factory to use instead of the factory's commercial invoice?
Posted Tue, 03 Oct 2023 14:17:09 GMT by Jason Croke
Who owns the goods at the time the goods are shipped from Germany? If you take ownership of the goods in Germany, firstly you'll need a German VAT registration as you are making a supply of goods in Germany. If the German supplier is shipping your goods, they should be using the value they sold it to you as the value on the paperwork, also the German supplier would charge you German VAT as they (the supplier) are not exporting their goods, they are exporting goods they have first sold to you and are the shipping your goods to your end customer. If you do not take ownership of the goods in Germany and the German supplier owns the goods and is "making the sale" directly to the customer and you are just an agent/middleman, they they would use the value they sold it to you for (the lower amount) and you will need to ask the supplier to instruct the freight agent to substitute their supplier invoice with your own you get your invoice inserted into the shipment as the official commercial invoice you'll need to liaise with the German supplier and whoever their freight agent is. However, if you are asking the freight agent to swap the German commercial invoice with your own, that that brings us back to who owns the goods and it would suggest you own the goods (otherwise if it was just a sales agent commission then you'd just issue your commission invoice and not concern yourself with commercial shipping invoices as you aren't selling anything, just your services of commission). Who owns the goods at the time they arrive at the port in UAE? If the shipment has your commercial invoice it, that suggests you are the exporter of the goods, and as the goods were in Germany when they left , that suggests you must own the goods in Germany. Check back with your German supplier to see whether they intend to zero rate their sale as a direct export under their own name/carriage or whether they will charge German VAT to you and then they ship your goods as a convenience for you. Their response will then clarify as to whether they think they are selling the goods or you are.
Posted Mon, 09 Oct 2023 12:08:53 GMT by HMRC Admin 19

We are unable to offer advice on commercial invoices. You will need to seek advice from a customs agent or the party who is handling the customs declarations.

Thank you.

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