Zero-rating consignment stock from the UK to Germany

Hello, we are a UK VAT-registered business. We are going to send our goods as consignment stock to a German retail store. The goods will remain in our ownership until sold by that German store to a retail customer in Germany. We will receive a sales report from the German store monthly and on the basis of that sales report will invoice the German store for the goods sold. The contract is for 6 months and at the end of 6 months all unsold goods will be returned back to us in the UK. 1. Should we obtain proof of export/full customs declaration when we send goods to Germany to support further zero rate if and when the goods will be sold? Technically the goods remain our own stock when crossing the border. 2. Will 3 months time limit apply for zero rate if the goods are sold in say 5 months after they left the UK? 3. Do we have to incur import VAT on returning our unsold goods when they are sent back to the UK? Thanks in advance

Useful thread with a similar query - https://community.hmrc.gov.uk/customerforums/ie/7d83f3c0-7f5b-ee11-a81c-002248c8c17d You will likely find that you require a German VAT registration. When you zero rate the export of goods from UK to Germany, those goods will be subject to German VAT at point of entry/German dockside, someone has to pay this German import VAT, either you or German retail store. If title remains with UK at all times (until the goods are sold in the store), then logically only the UK entity can be the importer of the goods as they are your goods and you retain ownership of them in Germany. In other words, you make a zero rated export in the UK and you are also the importer of the goods in Germany and liable for German import VAT. When the retail store sells your stock, what is actually happening is you sell the stock to the retail store first and then retail store, now owning those goods, sells to the store customer.....so this likely means you need a German VAT registration because you own/hold stock in Germany and you sell that stock./goods in Germany, it is a German to German supply....as a UK entity, you are not established as a German company in Germany, therefore VAT threshold in Germany is Nil for non-established businesses, UK entity registers for German VAT, charges German VAT on stock sale from consignment to retail store. UK entity also acts as importer of the goods into Germany, reclaims German import VAT on German its VAT return. Remember, the place of supply of goods is where they are at time of sale, the time you sell the stock is when you sell it to the retail store and where is that stock? It's in Germany, not the UK. HMRC are unlikely to be able to advise you on German VAT or EU/German rules, so you should speak to your Accountant or liaise with your freight agents/couriers to better understand the implications of importing goods into an EU member state on a consignment stock basis. HMRC do not seem to have any guidance on this (other than pre-Brexit/prior to 2020 guidance which is no longer applicable), because this forum does not approve of external links (for obvious reasons), then Google "consignment stock, 2021" which should produce several links for you to explore. When unsold stock is returned, it is important it is sent back to the UK under an appropriate customs code so that it is not subject to UK import VAT, another reason why to speak at length to your freight agent/courier as well as the retail store as they are likely the ones arranging return shipment and if they do not use the right (Customs Procedures Codes) CPC's when the goods are exported to Germany and when they are returned to the UK.

Hi ,

Please check Vat Notice 703 sections 6 which covers proof of export information. See : VAT on goods exported from the UK (VAT Notice 703)   . Trader will have to check with VAT team about the 3 months limit and zero rating . Thank you .