Claiming VAT back on DDP

Hi all. I have a customer in Ireland who would like us to export from UK to them using DDP terms. We would pay the tax and duty under these terms and then invoice the customer separately for this expense. I have no issue with this, but they have raised the valid question, are they able to still claim VAT refund on the import? I have searched this but cannot find any conclusive answer. Any advice would be much appreciated.

Hi Rob Allen I am assuming when you say Ireland you mean ROI. If you are VAT registered and exporting goods then the goods are zero rated for UK VAT but subject to import VAT and possibly duties in Ireland . If this is a question about import VAT recovery in ROI then this is really a question for the Irish Revenue. In general terms VAT recovery on imports will depend on who is declared as the importer and also who has the right to VAT recovery in local legislation. If you are using DDP do you mean incoterms or a parcel delivery service terms . They are different but either way be very clear who is responsible for what not only for the taxes .

Agree with Customs oldtimer , be very clear about who takes responsibility for what. DAP is best for consignments which are not considered parcels , usually handled by Fast Parcel Operators such as DPD UPS etc.. DDP Means you pay to the door GB-IE, and you are importer of record. Assuming your company have no fiscal representation in IE , means you cannot recover the VAT. Assuming your company have no fiscal representation in IE You are able to pay Customs Agent fees , but the VAT has to be paid by the importer in IE. Postponed VAT accounting PVA is available in IE for a company which is VAT Registered in IE. PVA the IE company would not pay any VAT on import at the BORDER , but satisfy the VAT on their next VAT return in IE. Advise should be sought on how PVA works in IE by the Importer .

Hi Customs Old timer. Many thanks for your reply. Yes it is indeed ROI. I have sent the goods under incoterms DDP so therefore I believe that I am the declared importer (paying the duty as well). The initial plan was that once I was invoiced by the courier for the tax and duty, I would then invoice our customer for the amount and maybe they could claim it back. Or possibly there is a way for us to claim back the VAT ourselves. Luckily for us we have a very good relationship with our customer and what will be will be. They are contacting Revenue on their side in Ireland as well. Thank you again for your advice. It is much appreciated.

Hi Rob Allen Unless you have an EU EORI number and established somewhere in the EU or have an indirect customs representative it is unlike that you could be the importer in ROI. If you agreed with your carrier to pay import taxes they will invoice you whoever is the importer. You would also need to be VAT registered in ROI to either recover import VAT yourself or invoice your customer ROI VAT. You can of course invoice your customer for the charge s you have incurred but as it wouldn’t be considered a VAT charge then it wouldn’t be recoverable. If your customer is the named importer and their VAT number declared the it’s probable that they could recover the import VAT or use PVA . But as i said before it’s best to check with Irish Revenue.

Sunil and Old Timer. Thank you very much for your advice here. Much of this does make sense to me and gives us other options to look into. We always send under DAP terms generally, so this is all a bit of learning curve. Much appreciated.

Hi Rob Allen

It is difficult for us to be able to advise on whether an Irish company can reclaim VAT in Ireland as they are subject to their own rules.
However if the goods were imported in to the UK then the ability to recover VAT by a UK company company would be determined by whether they are the importer of record in to the UK and whether they receive a C79 import VAT Certificate to justify the recovery of VAT.
There would be a similar process in Ireland for this and so they would need to check this with the Irish authorities.

Thank you

Thank you very much for that Admin5. Is there an option whereby I can pay the duty and then invoice the customer do you know? Therefore, the customer in ROI just has to pay the tax, and can then reclaim over there? Or does DDP have to include both duty and tax? Many thanks.

Hi Rob Allen It depends on what you and your customer have agreed . It is quite common in practice for sellers to pay import duties and buyers to be declared as importer and be responsible for VAT accounting. Most carriers use what is a DDP service rather than DDP Incoterms so again it’s up to you to instruct or agree with your carrier who is to pay what.

Customs Oldtimer and everyone else, thank you very much for your advice and guidance on this. Very helpful indeed.

Hi,
We would recommend speaking to our Customs Team and the shipping agent about this incoterm and how it works in practice.
Please see below;
Imports and exports: general enquiries
Thank you.

 

Hi All, My client is registered in UK and they have one customer from the Republic of Ireland. This customer trades only on DDP terms. Hence my client were obliged to open an IE Vat number. This means that my client sell to the customer with Irish VAT reference, charging local 23% Vat and submit VAT returns in IE. My client doesn't have any establishment in Ireland. Customer has issues and sent debit note for administrative charges to my client. How my client can record it in their as per HMRC provisions ? Does these debit note will fall into IRIS framework or under reverse charge as per UK rules? Please advice.

Hi Krishna,
Please contact VAT helpline for help in relation to your query.
VAT: general enquiries
Thank you.