Archive: Brexit questions of the week
- What legislation must the storage and sharing of personal data in the UK comply with?
- What customs rules apply when I buy Northern Ireland-made incubators in England?
- My UK customer has returned a bread machine for repair and adjustment. What do I have to arrange?
- What to arrange when shipping beer to the UK?
- Will I get a duty reduction when importing funny Christmas sweaters from the UK?
- Different VAT when importing Irish or Scotch whisky?
- Import duties on bouquets with flowers from various countries?
- My carrier has no people available to clear my shipment. What can I do?
- I have an Article 23 permit, but still have to pay VAT on import. Why?
- A declaration of preferential origin from Northern Ireland?
- Can my technician install gas boilers in the UK?
- What is the difference between a Certificate and a Statement on Origin?
- How do I export my ceramic artifacts to English private individuals?
- Do I register for VAT in the UK for the services I provide?
- I am taking my laptop to a job in the UK. What should I take into account?
- My UK customers return a lot of clothing. How do I handle these returns?
More articles about doing business with the UK after Brexit
What legislation must the storage and sharing of personal data in the UK comply with?
With data storage in the cloud (in Dutch), it is not always clear where your data is located. It could very well be in another country. The protection of personal data is not regulated in the same way in all countries. Therefore, it is important to be careful when exchanging and storing personal data abroad. Exchanging data with another country is only allowed if that country protects the data (in Dutch) sufficiently.
Within the EU
Is your data stored in an EU country? Then the same regulations apply as in the Netherlands. Every company in an EU country must comply with the General Data Protection Regulation (GDPR). This European privacy law applies to all companies and organisations that record personal data of customers, staff, or other persons from the EU. Almost all entrepreneurs have to deal with the GDPR, including self-employed persons and small businesses. This also applies to schools, healthcare institutions, associations, and foundations. All international companies doing business with the EU must also comply with the GDPR.
Outside of the EU
The EU prohibits the storage of personal data of EU citizens outside the EU. Due to Brexit, the UK is no longer subject to the GDPR. There was a transition period from 1 January to 1 July 2021. From 1 July 2020, the so-called adequacy status of the UK applies: under the GDPR adequacy decisions can be adopted by the EU if a third country has an equivalent level of data protection. The UK has implemented a new domestic data privacy law called UK-GDPR. This law is exactly the same as its EU counterpart. Transfers of personal data between the UK and EU may therefore take place without the need for additional safeguards. In practice, this means you will need to adhere to the regulations of the UK-GDPR and EU-GDPR regarding the use and storage of personal data.
This adequacy decision will last for a period of 4 years. In the meantime, should the UK make any changes to their UK-GDPR law, the European Commission may repeal the UK adequacy decisions.
There is one exception: the adequacy decisions do not cover data transferred to the UK for the purposes of immigration control, or where the UK immigration exemption applies.
What customs rules apply when I buy Northern Ireland-made incubators in England?
“I buy incubators from my British supplier in Manchester, England. He is a distributor for a Northern Irish manufacturer of these machines. What customs rules apply when I import the incubators into the Netherlands?”
The UK consists of England, Scotland, Wales, and Northern Ireland. Northern Ireland follows the customs rules of the EU. This separate status is defined in the EU-UK Trade and Cooperation Agreement 'Protocol on Ireland and Northern Ireland'.
Export from Northern Ireland to England
The manufacturer files an export declaration for the incubators with customs, using HS code 8436 21 00 00, upon sending them to the distributor in England. The British distributor files an import declaration in England. Customs assesses whether the distributor must pay import duties. For these incubators, 0% import duty applies in the UK. The distributor pays 20% UK VAT, but can claim a refund.
Export from England to the Netherlands
Generally speaking, the UK distributor will file the export declaration. In the Netherlands, the importer files an import declaration. However, if the buyer and seller have agreed upon the Incoterm EXW, the buyer is responsible for the export declaration. If they have agreed upon the Incoterm DDP, the seller needs to file the import declaration.
In the Netherlands, you pay 1.7% import duty and 21% VAT to import incubators. You do not pay any import duty if the incubators are of preferential UK origin. In the EU-UK Trade and Cooperation Agreement (page 487, and notes 3 and 4 on page 441) you can read when a machine with HS code 8436 has preferential UK origin. You can reverse-charge the VAT with an Article 23 permit.
Proof of preferential origin
You prove the preferential UK origin of the incubators to Dutch Customs with a Statement on Origin. Your supplier includes the text of the statement (pdf, explanation in Dutch, texts in English) on his sales invoice and adds his GB EORI number.
Your supplier needs proof that the incubators are of preferential UK origin. After all, the supplier did not produce them. He asks his Northern Irish supplier for a Supplier's declaration for products having preferential origin status.
Buy directly in Northern Ireland
You can also have the incubators shipped directly from Northern Ireland to the Netherlands. Because Northern Ireland follows the customs rules of the EU, you can import the goods into the EU without a customs declaration. In this case, the manufacturer must agree to the direct delivery of the incubators. This can have consequences for his agreement with the English distributor. If the distributor holds exclusive sales rights for the EU or the Netherlands, he will have to fundamentally change this agreement. The distributor then loses income, because he no longer supplies you.
Northern Irish VAT
In case the Northern Irish manufacturer directly supplies the incubators, he may transfer the Northern Irish VAT to you. This is according to the rules for intra-Community acquisition. The manufacturer will include his Northern Irish VAT number on the invoice, plus your Dutch VAT number. He will state the 0% VAT rate with the text: 'VAT zero-rated intra-Community supply of goods following article 138 Directive 2006/112/EC'.
You include this VAT in your VAT return under section 4b 'Supplies/services from countries inside the EU'. You calculate 21% turnover tax over the purchase amount of the invoice and include this amount in your VAT return. You also include VAT amounts listed under section 4b in section 5b, ‘Voorbelasting' (input tax). On balance, you will not pay any VAT on the purchase.
My UK customer has returned a bread machine for repair and adjustment. What do I have to arrange?"In 2005, I delivered a bread machine to a UK customer. My customer now wants to have this machine repaired and adjusted. What do I have to arrange for export and import?"
The bread machine with HS code 8438 10 10 00 is located in the UK. The EU is a ‘third country’ for the UK, which means an export declaration at UK customs is required. And an import declaration is required at Dutch Customs.
UK declarationThe exporter files an export declaration with customs in the UK. Who acts as an exporter? You, a customs agent, or your customer?
If you agree with your customer that you pick up the machine and arrange all transport, then you are the exporter. You can arrange this with the Incoterm® Ex Works, for example. You arrange the export declaration with British customs. For this you need access to the UK declaration system, which is the Customs Handling of Import and Export Freight (CHIEF). You also need a UK EORI number.
You can also outsource the declaration to a local customs agent. For this you also need a British EORI number for your company, but you do not need to access the CHIEF system yourself.
You could also agree with your customer that they will file a declaration in the UK. In that case, you will need to use a different Incoterm®, because your customer is now also responsible for (part of) the transport of the bread machine.
Declaration in the NetherlandsYou will need to agree on who will act as the importer for the import declaration at Dutch Customs. If your customer arranges all transport, including customs declaration, you agree on Incoterm® DDP. If you agree on a different Incoterm® together, you are responsible for the customs declaration.
You use an EORI number for the customs declaration in the Netherlands. If you make a declaration yourself, you need software to access the declaration system of Dutch Customs. You can also outsource the declaration to a customs representative, carrier, or forwarder.
In the Netherlands you pay import duties and VAT. The import duty on this bread machine is 1.7%. The VAT rate is 21%.
After repairAfter the bread machine has been repaired and adjusted, it will be returned to the UK. Customs declarations are also required for the return journey. In the UK, you pay duties and UK VAT on the import of the machine, including repair and adjustment costs. For the bread machine with HS code 8438 10 10 00 the import duty is 0%. The VAT is 20%.
Less costs with customs processingYou pay no import duties and VAT when you use the inward processing procedure. For this procedure, you apply for the ‘inward processing’ authorisation via the EU Trader Portal. In the UK, your customer applies for the ‘outward processing’ permit, because this permit requires you to be in the UK. You now do not pay import duties and VAT on the bread machine that you have repaired and adjusted. In the UK, your customer will only pay duties and VAT on the costs of the repair and adjustment. The import duty is 0% and the VAT 20%. If the repair is covered by the warranty, the VAT on the repair is also exempt. Your customer then only pays VAT on the value of the adjustment.
What to arrange when shipping beer to the UK?"I sell bottles of home-brewed beer through my webshop. I receive orders from the UK, from individuals and companies. I want to ship the beer in a package. The value per shipment remains below €100. What do I have to arrange for shipping these beer packages?"
Product requirementsBefore sending the beer packages, check whether the beer meets the product requirements in the UK. For example, whether it is safe for consumers or whether the labels meet the requirements. The British government has information about this.
Export declarationSince the UK is not an EU country, you will have to deal with customs declarations. You file an export declaration in the Netherlands. Discuss with the parcel service whether they can arrange this for you. You can only submit a customs declaration yourself if you have access to the digital system of customs. To do so, you need software and knowledge about how to complete a declaration. Most parcel services have access to the customs declaration system.
VATOn your invoice you include 0% Dutch VAT and the statement "export from EU", because the shipment leaves the EU. In your records you provide evidence that the shipment has indeed left the EU. This can be done with the export declaration, transport documents, invoices, and agreements.
Declaration in the UKIn the UK, someone declares the goods for import to UK customs. Also, English VAT, import duties, and excise duties are paid. For parcel shipments with a value up to GBP 135, the seller pays VAT. As a seller, you need a British VAT number to pay the VAT. And you need a British EORI number (GB EORI) for your import declaration. Your parcel service will ask you for this information. The import declaration works differently for excise goods.
Declaration excise goodsBeer is an excise good. When importing excise goods into the UK, the buyer pays VAT and the import declaration to UK customs must be made in their name. Arrange with your parcel service that they will file the declaration in the UK in the name of your customer. Provide the parcel service with the following statement: "goods to be imported by the importer". If your customer is a company, the parcel service may file a declaration with the GB EORI number of your customer or with the GB EORI number of the parcel service. If your customer is a private individual, the parcel service uses its own GB EORI number. Then, your customer pays VAT and excise duty, in English excise, via the parcel service to the British government. Both private individuals and companies pay VAT and excise duties.
For beer with commodity code 2203 00 01 00 you do not pay any import duties when importing into the UK. Read more about the particulars per type of excise product.
Excise duty already paidAs a seller, if you have paid Dutch excise duty, you must enclose a document of origin with your shipment, such as your sales invoice or transport document. In the Netherlands, you reclaim the excise duty paid (in Dutch). In the UK, your customer pays UK excise duty. A rate of 19.04 pence per % alcohol per litre applies to most types of beer.
Suspension of excise dutyYou can also deliver excise goods without excise duty, which is also referred to as ‘suspended from excise’. You may suspend excise duty on the shipment of beer under certain conditions. For this you need an Excise Goods Place Permit (Vergunning accijnsgoederenplaats, in Dutch) or a Registered Sender Permit (Vergunning geregistreerde afzender, in Dutch). You must enclose an ‘electronic administrative document’, an e-AD, with your shipment. An e-AD provides a guarantee to the Tax and Customs Administration that in the event of loss or theft of the shipment, excise duty will still be charged to the seller. You create an e-AD in the Excise Movement and Control System (EMCS). When the shipment has left the EU, the guarantee and liability for the excise duty ends.
The UK also uses EMCS. Your customer may only receive the beer suspended from excise duty if it is a company that has a licence for this. In the UK these licences are called ‘registered consignor’ and ‘excise warehouse’. The British government informs British companies about importing excise goods.
Will I get a duty reduction when importing funny Christmas sweaters from the UK?"I sell funny Christmas sweaters through my online shop. You’ve seen them: sweaters with a huge, red-nosed reindeer on them, for instance. Shipments from the UK will arrive again soon. Do I have to pay import duties despite the trade agreement?"
Preferential originThe standard import duty on these sweaters with HS code 6110 11 10 00 is 10.5%. Due to the free trade agreement between the EU and the UK, the import duty is 0% if the sweaters are of preferential UK origin. The treaty explains the requirement that the sweaters must meet to get preferential UK origin. This requirement is a "product-specific rule of origin", outlined in Annex ORIG-1 of the Free Trade Agreement (FTA). In addition to this rule, you must also take a look at the notes for textile goods, as explained below.
Product-specific rule of originTo apply the product-specific origin rule, you need to know how the sweaters are made. Are knitted parts sewn or knitted together, or are the sweaters knitted entirely with a knitting machine?
Sewing knitted parts togetherThe requirement (61.01-61.17) "knitting or crocheting accompanied by making-up including cutting of fabric" applies. The sweaters are given preferential UK origin if the parts you sew together are knitted in the UK. In addition, these parts must be knitted from yarns spun in the UK.
Knitting complete sweaters with a knitting machineFor this, 1 of these 3 requirements must apply:
- "Spinning of natural or man-made staple fibres combined with weaving" (requirement 51.11-51.13). The sweaters are given preferential UK origin if the yarns used are spun in the UK from wool and the sweater is knitted from this yarn. The origin of the wool itself does not matter.
- "Extrusion of man-made filament yarn combined with weaving" (requirement 51.11-51.13). Extrusion is the production of threads of synthetic fibres by heating plastics and pressing them through a mould with a small nozzle. The fibres are then spun into yarns. When knitted from these synthetic yarns, the sweaters are of preferential UK origin.
- "Knitting and making-up in one operation" (requirement 61.01-61.17). For requirements 1 and 2, the textile type is important. For requirement 3, it does not matter which fabric is used for the sweaters, as long as the sweaters are fully knitted in the UK and sewn together. Only then will the sweater be of preferential UK origin.
The product-specific rules of origin for sweaters can be found in the trade agreement in Annex ORIG-2, “Chapter 61. Articles of apparel and clothing accessories, knitted or crocheted” (page 473)
NotesIn addition to the product-specific rules of origin, there are specific rules in the notes of the trade agreement, Annex ORIG-1 (pages 444 to 447). Notes 6, 7, and 8 provide additional options whereby textile goods such as the ‘funny Christmas sweaters’ can still obtain preferential UK origin, even if they do not fully meet the product-specific requirements.
ExampleThe sweaters are knitted from a combination of wool of preferential UK origin and synthetic yarns of, for example, Vietnamese origin. If the weight of these Vietnamese yarns is less than 10% of the total weight of all yarns, the sweaters will still have preferential UK origin. This is called tolerance.
Statement on originIf the processing of sweaters in the UK complies with the rules of origin, the sweaters are of preferential UK origin. As an importer, you do not pay any import duties. For this you need proof of preferential UK origin, a Statement on Origin. Your supplier puts this statement on their sales invoice with their British EORI number (GB EORI). Make sure your supplier uses the correct text. If this deviates, you risk that customs will not accept this statement and you still pay import duties.
Different VAT when importing Irish or Scotch whisky?
"I want to expand my whisky range with Irish and Scottish single malt whisky. I buy these directly from the distillery. Does it make any difference for VAT whether I import Irish or Scotch whisky?"
Yes, this certainly works differently. Which Ireland are we talking about? There is the Republic of Ireland and Northern Ireland. And the procedure in Scotland is different yet again.
Republic of IrelandThe Republic of Ireland is part of the EU. You do not need to declare the import of the purchased whisky. The VAT is reverse-charged through intra-Community acquisition, seeing as it concerns import from an EU country to the Netherlands. Your Irish supplier invoices 0% Irish VAT and includes your VAT identification number on their invoice. You include the Dutch VAT in your VAT administration.
Northern IrelandNorthern Ireland has a separate status. The country is part of the UK, but is subject to EU customs rules. You treat an import from Northern Ireland the same as from the Republic of Ireland. You do not declare an import and you do not pay any import duties. Here too, the VAT is reverse-charged according to intra-Community acquisition. Make sure that your Northern Irish supplier includes their correct VAT identification number on their invoice. This number must start with the country code XI. You can check VAT identification numbers via the VIES verification system.
ScotlandScotland, like Northern Ireland, is part of the UK. But the country does not have a separate customs status and is a ‘third country’, a country outside the EU. If you import whisky from Scotland, you must submit an import declaration to Dutch Customs in the Netherlands. The whisky must be exported with a declaration to UK customs. Your supplier will usually take care of this. They’ll include 0% VAT on their invoice. In the Netherlands you pay Dutch import VAT.
Import and excise dutiesScottish single malt whisky falls under commodity code 2208 30 30 00. Irish single malt whisky has a different commodity code: 2208 30 82 00 (for bottles with a volume of less than 2 litres). You do not pay any import duties for both these types. You do need to pay excise duty, which is € 16.86 per percentage of pure alcohol.
In this article on import levies you can read how to deal with excise duties in the Netherlands. Your suppliers will have to deal with the excise rules in their own country. The UK government provides information on excise duty to Northern Irish and Scottish suppliers. The Irish government informs suppliers in the Republic of Ireland.
Import duties on bouquets with flowers from various countries?"I deliver bouquets of flowers to customers in the United Kingdom. The bouquets here in the Netherlands are composed of different types of flowers. I get flowers from the Netherlands and from countries outside the EU. Will my customer get a reduction on the import duties?"
Freshly cut flowers are usually classified under HS code 0603. In the UK you pay an 8% duty on goods with this HS code. Due to the trade agreement between the EU and the UK, you get an exemption from these import duties in the UK if all flowers in the bouquet are of preferential EU origin. The requirement that the flowers must meet is that they are "wholly obtained" in the EU. This means that the flowers must be grown or harvested in the EU. You pay 8% import duties for flowers grown or harvested outside the EU.
Separate deliveryIf you do not deliver the flowers as a bouquet but separately and list them on the invoice separately, you can add an invoice declaration to your invoice for the flowers with preferential EU origin. This way, your customer will receive an exemption from import duties for flowers of preferential EU origin. The other flowers are taxed with 8% import duty.
For shipments with more than €6,000 in preferential goods, you need a REX registration. You put the number of this registration on your invoice statement. Clearly specify on your invoice which flowers are of preferential EU origin and which are not.
Your customer may still be exempted from import duties on the complete bouquets if you can benefit from the "tolerance rule".
Tolerance ruleUp to 15% of the total weight of the bouquet may consist of flowers without preferential EU origin. This is called the tolerance rule. This way, your customer will still receive an exemption from import duties in the UK for the entire bouquet of flowers. This tolerance rule can be found in the rules of origin in the Trade and Cooperation Agreement between the EU and the UK on page 42 Section 1. Rules of origin, article ORIG.6. This tolerance rule only applies to exports to the UK and imports from the UK. Different tolerance rules apply to other countries (in Dutch) the Netherlands has a trade agreement with.
EvidenceCustoms may request proof of the preferential EU origin of your goods. If you buy flowers, ask your supplier for a supplier's declaration of preferential origin. If you export flowers grown in your own company, a grower's statement demonstrates that you have grown and harvested the flowers in your own company.
BOIAre you unsure whether your bouquet will receive preferential EU origin or are you unable to determine this yourself? Then apply for Binding Origin Information (BOI, Bindende Oorsprongsinlichting, in Dutch) through Dutch Customs. This application is free of charge.
My carrier has no people available to clear my shipment. What can I do?
"I export concrete ping pong tables to customers in the UK. I collect orders from different customers and deliver them in 1 shipment. I have agreed with my customers that I will deliver under Incoterm® DDP. However, my carrier states that he does not have people available to clear the shipment in the UK. What can I do?”
Since 1 January 2021, the UK is considered a third country. That’s why you have more obligations as a seller when you use the Incoterm® Delivered Duty Paid (DDP). You are responsible, among other things, for the export declaration from the EU, as well as for the declaration for import into the UK.
UK import declaration
You need a UK EORI number when submitting a UK import declaration. You also need a UK VAT number to pay VAT. You submit your import declaration in the British CHIEF system (Customs Handling of Import and Export Freight). For this you need specific software. You can find suppliers of this software through the British government.
After submitting your import declaration you pay British VAT. You can authorize someone to do this on your behalf, a Tax Agent. You also pay British import duties. Due to the trade agreement between the EU and the UK, many goods are exempted from import duties or come with a reduction. The condition for this is that your goods are of preferential EU origin.
AlternativesThere are alternatives if you do not want or cannot arrange the DDP delivery yourself. You can agree on a different Incoterm®. If you still want to unburden your customer, Delivered At Place (DAP, in Dutch) or Delivered at Place Unloaded (DPU, in Dutch) are good alternatives. The biggest difference between these 2 Incoterms® is that under DPU you also unload the goods. For concrete ping pong tables this can be tricky and DAP may be a better option.
If you do use DDP, engage a logistics service provider, a customs agent, or forwarding agent, who will take care of the declaration for you from the UK. This can be a Dutch service provider or a British one. The Dutch forwarding and logistics organization FENEX (in Dutch) has member lists of Dutch forwarders. The British government has an overview of British service providers.
I have an Article 23 permit, but still have to pay VAT on import. Why?"I import Scottish kilts, throws, and shawls via parcel shipments from the UK. I have an Article 23 permit, which means I include the import VAT in my VAT return without having to pay it. Still, I’ve received an invoice from the carrier stating import VAT. What's going wrong here?"
The invoice includes import VAT because no reverse charge on the basis of Article 23 of the Turnover Tax Act was indicated during custom clearance of the parcel post. This is usually because the parcel service does not know or has not indicated that you have this permit. How can you fix this?
- Have your British supplier state on his sales invoice that you, as a customer, are making use of the Article 23 Turnover Tax Act.
- Some parcel services keep a record of companies that have an Article 23 permit. Check whether the parcel service that sends your package keeps such records.
- Ask to be included in this database, so that the parcel service states with the import declaration that you have an Article 23 permit.
- If the parcel service does not work with such records, ask your UK supplier to use a parcel service that you know does keep such records.
- The parcel service can make the import declaration in the name of the sender or in the name of the recipient. Make sure that the declaration is in your name as the recipient, with your VAT identification number (in Dutch) and EORI number. This is the only way you can make use of your Article 23 permit.
ObjectionDo you still have to pay VAT despite your Article 23 permit? Not worries, you can deduct the paid import VAT in input tax. You’ve simply advanced these taxes first. You can also object to the payment of the import VAT. The payment request for VAT states how you can lodge an objection.
Check whether the parcel service uses the correct commodity code (HS code) in the declaration. You may be paying too much on import duties due to the wrong commodity code. Or too little, running the risk of additional tax. You can object (in Dutch) when the wrong commodity code is used.
VAT declarationWith an Article 23 permit, you do owe VAT to the Tax and Customs Administration, but you do not pay it. You calculate Dutch VAT on the purchase value of the goods yourself and increase this by the amount of the import duties, if there are any. The VAT rate is usually 21%, unless the goods are subject to a lower VAT rate. You include the VAT in your VAT return under heading 4a, delivery/services from countries outside the EU. In section 5b you deduct this VAT in input tax. So, in the end, you will not pay any VAT.
A declaration of preferential origin from Northern Ireland?"I purchase various dairy products from my supplier in Ballymena, Northern Ireland. I deliver some of the products he produces to Swiss customers. Can the Northern Irish company issue a supplier's declaration of preferential origin so that there is a reduction on import duties in Switzerland?"
Since January 1 2021, Northern Ireland has a separate status and follows EU customs rules. For preferential origin with other EU agreement countries, such as Switzerland, Northern Ireland is not part of the EU. Goods originating in Northern Ireland are therefore not entitled to a reduction in import duties in these EU contracting countries. Therefore, the producer in Northern Ireland may not issue a supplier's declaration of preferential origin.
Processing of Northern Irish productsNorthern Irish dairy products do not count as an EU ingredient when you make other products using them. For example, when you make cheese from Northern Irish cow's milk. This cheese does not receive a reduction in import duties in Switzerland. The condition in the free trade agreement between the EU and Switzerland is that the cow's milk is of preferential EU origin. In other words, the milk must have been milked in the EU from EU cows.
Import in the NetherlandsGoods can be shipped from Northern Ireland to EU countries without a customs declaration. You even make use of the Intra-Community Supply, which means that the Northern Irish supplier can reverse-charge Northern Irish VAT to you due to their separate status. And there are no import duties in the EU on goods of Northern Irish origin.
There are no borders between Northern Ireland and the Republic of Ireland. This was an important condition set by the UK and the EU during the Brexit negotiations to prevent conflicts from arising again between Northern Ireland and the Republic of Ireland.
Can my technician install gas boilers in the UK?"We delivered gas boilers to a customer in the UK. He will be using these in his greenhouse. Normally, our technicians drive their van to our customers without any problems to install the gas boilers. Is that also possible in the UK?"
Diploma and registrationThe technician travelling to the UK must be certified. You need to register your EU company in the UK Gas Safety Register. This register states the professional qualification of your technicians. Experience and qualifications that you have acquired within the EU do not count towards this professional qualification. Your technician must have a UK degree. The British Government informs you of which diplomas under the heading Qualifications.
When travelling to the UK and then back to Europe, your technician must take into account the travel restrictions due to the corona virus. Find the latest information here (in Dutch).
Import duties and VATIf you have already shipped the gas boilers, the customs declaration has already been arranged by you or your forwarder. If your technician takes the boilers with him in his van, you must declare this export to Dutch Customs. You then include 0% VAT on your sales invoice.
You file an import declaration in the UK. This can be done in the name of your customer, for which you need his British EORI number. If you make the declaration in the name of your company, you will need a British EORI number yourself. In addition, you must have a UK VAT number and pay VAT and import duties in the UK.
On Access2Markets you can check what the rate of import duties is. When the gas boilers are of so-called EU preferential origin, a reduction or exemption on the import duties applies. To prove this EU preferential origin, you need a Statement on Origin. In Access2Markets you can use the ROSA tool to investigate whether a product is of EU preferential origin.
Temporary admissionYour technician will bring the tools he uses to install the gas boilers at your customer’s in the UK back to the Netherlands. You only import these into the UK temporarily.
Upon departure, you must issue an export declaration to Dutch Customs. In the UK, your technician will temporarily import the tools and will pay a deposit. Upon his return to the Netherlands, he declares the import of these ‘returned goods’.
Tip: bring a list with detailed goods, including make, type, and serial numbers.
ATA carnetWith an ATA carnet you do not need to pay a deposit and your mechanic will quickly get his tools through customs in the UK. There are costs associated with an ATA carnet.
What is the difference between a Certificate and a Statement on Origin?"My English customer has asked me for a Statement on Origin. I have only heard of the Certificate of Origin. What is the difference between these documents?"
A Certificate of Origin (certificaat van oorsprong, CVO) and a Statement on Origin both declare the origin of a product. Origin refers to the country where a product is harvested, extracted from the ground, caught, or made. The main difference is that a Statement on Origin states the preferential origin and a Certificate of Origin the non-preferential origin.
Preferential originWith a Statement on Origin you demonstrate the preferential origin of a product to customs. Preference in this case means benefit or exemption from import duties. For import this is handled by Dutch Customs, for export UK Customs.
Trade AgreementThe EU and the UK have made agreements on import duties in their free trade agreement. You do not pay any import duties when importing or exporting products of preferential origin from the UK or the EU. You can assess whether a product is of preferential origin on the basis of the Rules of Origin, from Access2Markets.
Invoice declaration ‘Statement on Origin’The Statement on Origin is an invoice declaration (see question 8) that you include on your sales invoice if the product meets the rules of preferential origin. Below an invoice value of €6,000, you can declare this without permission from customs.
REX registrationIf the value of the preferential goods on an invoice is higher than €6,000, you need a registration number from Dutch Customs in order to draw up such an invoice declaration. This is called a REX registration, and means that you are registered with customs as a Registered Exporter (in Dutch). You then include the REX registration number on your sales invoice.
You can use a Statement of Origin on a voluntary basis. Also without a Statement of Origin you can import and export goods in the EU and the UK. But since the preferential origin of the goods is not proven without a Statement of Origin, you would need to pay import duties in this case.
Non-preferential originWith a Certificate of Origin you demonstrate the origin of products that you supply to your British customers. You can apply for a Certificate of Origin (Certificaat van Oorsprong, CVO) at KVK, which then ratifies it. With a Certificate of Origin you do not get a reduction in import duties.
Certificate of OriginSome countries do not allow the import of products from other countries for political, economic, or health reasons. If you deliver an order to such a country, the local government will want to know in which country these goods have been made. You demonstrate this with a Certificate of Origin.
The UK has not imposed any trade policy measures. That is why you do not need a Certificate of Origin for your export to the UK. Sometimes your customers may ask you for a Certificate of Origin. They might ask this, for example, if they further export (part of) your delivery to a country where a Certificate of Origin is mandatory. The Certificate of Origin you provide will give your customer validated proof of the origin of the products delivered. Conversely, if you import goods you can also ask your British supplier for a Certificate of Origin.
How do I export my ceramic artifacts to English private individuals?"I make ceramic artifacts. I sell these unique sculptures to English individuals through my website. This was very easy before 2021. I don't want my customers to have to bear the extra costs. What do I have to arrange?"
Arrange in the NetherlandsThe UK is a country outside the EU. You submit an export declaration for your export shipment to Dutch Customs. You calculate 0% Dutch VAT, because the shipment leaves the EU. You need to provide evidence that the shipment has left the EU, such as a copy of the export declaration, transport tickets, or your sales contract. You need a Dutch EORI number for the export declaration. You file a digital declaration at customs yourself, or ask your carrier to do this for you.
Arrange in the UKWhat you arrange on the UK side depends on the value of your shipment. If the value of your shipment is less than GBP 135, you will need a UK EORI number and UK VAT number. In this case, you are responsible for paying 20% VAT in the UK. Your customer in the UK does not pay any additional costs for import duties or handling, such as costs incurred by your carrier for the customs declaration.
If the value of the shipment exceeds GBP 135, you must declare the shipment for importation to UK customs. Import duties, VAT, and handling costs may be charged. In this case, you will not pay UK import duties for unique art sculptures, as long as the HS code or commodity code falls under 9703 00 00. Your customer pays the VAT and handling charges. In this case, your company does not need UK VAT registration.
VAT and handlingWho pays VAT and handling in the UK, whether your customer or yourself, depends on the Incoterm® you agree on. If you want to completely unburden your customer, choose Incoterm® Delivered Duty Paid (DDP). With all other Incoterms® your customer pays the VAT and additional costs.
Consequences of DDP deliveryProviding the highest level of service to your UK customer and using Incoterm® DDP will affect your business. For DDP deliveries you need a UK EORI number and UK VAT number.
Via your carrier you pay any import duties and VAT in the UK, plus handling costs. This will lower your profit margin. You can solve this by increasing your export prices outside the EU. If you do this, clearly state on your website that you charge higher costs for export outside the EU. Find out how e-commerce (in Dutch) works in the UK.
Do I register for VAT in the UK for the services I provide?"I provide marketing services from the Netherlands to an English company. The value of this is expected to remain below €40,000 in 2021. Do I now have to charge English VAT to my customer, and register my company for VAT in the UK?"
After Brexit, service delivery to the UK will fall outside EU law. This means that you can no longer reverse-charge the VAT to your customer. The standard rule is that you charge the VAT rate of your customer's country. You can find out whether this applies to all services in the tool provided by the Tax and Customs Administration: 'Diensten in en uit het buitenland' (Services in and from abroad, in Dutch).
In this case, you will charge UK VAT. You then pay this VAT in the UK. To do this, you need to register your business in the UK for VAT. You can also use an English agent, a fiscal representative, who pays the VAT on your behalf. Discuss your options with your bookkeeper or accountant. The UK government explains how to apply for a VAT number in the UK.
I am taking my laptop to a job in the UK. What should I take into account?
“I have an assignment in the UK and will be installing software at a company. The software is on my laptop, so I am taking it with me. But how do I get my laptop across the border?.”
Check the corona measures before you leave. The British government and the Dutch government (in Dutch) will inform you about travel to and from the UK. For example, when returning to the Netherlands, a quarantine obligation applies since 1 June 2021. An exception to the quarantine obligation applies to mechanics and installers, among others.
Departure from the Netherlands
Personal luggage that you take with you to the UK must be declared at customs. Your laptop, for example. You make an automatic declaration when you enter the airplane, train, or boat through the green customs zone (nothing to declare). However, this gives you no proof that you have declared your luggage. And you will need proof of declaration when you return to the Netherlands.
That is why you must first report to customs before you leave. Plan some extra time for this. Bring proof of purchase for your laptop to demonstrate that you bought the laptop in the Netherlands. You can also ask Customs before departure for a Customs Declaration (in Dutch), a so-called DO131. For example, customs will add a DO131 statement to your proof of purchase, showing that you bought your laptop within the EU.
Customs posts are often unmanned, making declarations difficult. So make sure your papers are in order in case you are checked.
Entering the UK
When you enter the UK, you file an import declaration. If you walk through the green 'nothing to declare' zone, you automatically file a declaration for final import. However, you only want to temporarily import your luggage into the UK, because you will take it back with you on the return journey.
Your personal luggage may have a maximum value of 390 GBP. In case your ‘personal allowance’ has a higher value, you pay import duties and English VAT. You do not owe import duties and VAT for temporary import.
For temporary import, make a verbal declaration in the 'red channel' or 'red-point phone' upon entry into the UK. For this 'Temporary Admission' you pay a deposit equal to the import duties and VAT. You will get the deposit back when you leave the UK. When leaving, indicate through the red chanel that you have concluded the temporary entry and want to receive your deposit back.
Return to the Netherlands
When you arrive in the Netherlands, you file another import declaration. With the proof that you have exported the goods before, you indicate that they are returned goods. This gives you an exemption from VAT and import duties. If you cannot show an export declaration, the proof of purchase for your laptop can help you get an exemption from import duties and VAT.
The ATA Carnet is an alternative to the above method. With an ATA carnet, the administrative actions at the customs borders are easier, because you prepare all paperwork in advance and do not pay a deposit. You apply for an ATA Carnet at KVK. There are costs associated with this.
My UK customers return a lot of clothing. How do I handle these returns?
“I ship clothing to consumers in the UK. My UK customers return a lot of clothing. Will I receive the paid import duties and English VAT back? And do I pay import duties and VAT in the Netherlands?”
Organise your return process
Map out the desired return process for your online shop. Discuss this with your carrier and your website builder. Set up your website in such a way that customers can easily order and return goods. An easy and inexpensive return procedure with a simple return form makes it more attractive for a potential customer to make a purchase.
Import duties UK and VAT
When the value of the shipment to the UK is less than £135, you pay UK import duties and VAT on the delivery. If the value of the shipment is higher than £135, your customer in the UK pays these costs. For returns, you can reclaim the paid import duties and VAT. You can do this yourself or leave it to your carrier. If your customer has paid the costs, they can arrange this themselves. To do this, submit form C&E1179 to the British HM Revenue & Customs (HMRC).
Import duties in the Netherlands and VAT
With the customs procedure 'Returned goods' (in Dutch) you avoid having to pay import duties and VAT for the returned goods in the Netherlands. You must demonstrate that the returned goods are the same as the ones you exported before. You can demonstrate this, for example, with the export declaration made earlier. The goods must return in the same condition as they were sent. And you need proof that the goods were exported before. In your import declaration to Dutch Customs you state customs code 604, 'full exemption' (volledige vrijstelling). The Returned Goods scheme applies up to 3 years after the export of a shipment.
Your carrier needs your Dutch and British EORI number and your Dutch and British VAT numbers. In both the UK and the Netherlands, the return shipment must be declared at customs. Collect all necessary information on the return form that your customer fills out. Include your EORI and VAT numbers in the form by default. Ask your carrier how you can organise returns as efficiently as possible.
Your carrier uses the customer's return form as an invoice for customs. Make sure that the track & trace number of the previous delivery is on the return form. Then your carrier can demonstrate to Dutch Customs which goods are involved and when they were exported.
A return will cost you money, because you or your carrier incur costs for transport and handling. Determine whether these costs outweigh the value of the goods. And whether you can resell the goods. If not, you can choose to have the customer keep the goods, have the clothing destroyed, or donate them to charity.
UK e-commerce market
Shipping software supplier Sendcloud surveyed the UK e-commerce market. 54% of UK online shoppers regularly return goods. A good return policy largely determines whether your customers will reorder. And most UK online buyers believe the seller is responsible for returns. If you unburden your customer, there is a greater chance that they will continue to buy from you.
Investigate whether the UK market still offers sufficient opportunity for your products.