Dropshipping VAT

[sarah233]

Hello,

I have an offshore company in Seychelles, but I haven't used it yet because I am still not clear about the regulations for VAT. I will use the company to do dropshipping from several Asians countries to Europe and US.

How will I pay for the VAT on imported products? Should I put my company number on the shipping note for custom clearance?

Thank you very much!

 

[AdamT1]

Hi, if you are going ship goods to EU countries via regular postal or courrier service (eg. DHL) you will state invoice value of your shipment and upon arrival in to the destination country courrier will inform recipient that in order to deliver the incoming shipment recipient has to pay import VAT (if applicable) + customs duties (if applicable) + customs clearing service fee. If this is how you intend then your invoice should state full company's details including reg. code.

However this creates problem with defining exact total cost to the client as you would quote client with your sales price only and leave your client with responsibility to deal with his own import taxes.

That is why major Asian suppliers usually arrange such shipments via local EU partner (that is usually customs bonded warehouse or courrier service such as e.g. DHL) in the destination country. This way supplier knows exact final price (including VAT + duties + import & local delivery cost) and quote client with total gross amout. In this structure your company is a seller that is fiscally represented by local warehouse as you tax agent thus invoice would contain your company's details including reg. code as well as you tax agent's VAT code.

 

[sarah233]

Hi, if you are going ship goods to EU countries via regular postal or courrier service (eg. DHL) you will state invoice value of your shipment and upon arrival in to the destination country courrier will inform recipient that in order to deliver the incoming shipment recipient has to pay import VAT (if applicable) + customs duties (if applicable) + customs clearing service fee. If this is how you intend then your invoice should state full company's details including reg. code.

However this creates problem with defining exact total cost to the client as you would quote client with your sales price only and leave your client with responsibility to deal with his own import taxes.

That is why major Asian suppliers usually arrange such shipments via local EU partner (that is usually customs bonded warehouse or courrier service such as e.g. DHL) in the destination country. This way supplier knows exact final price (including VAT + duties + import & local delivery cost) and quote client with total gross amout. In this structure your company is a seller that is fiscally represented by local warehouse as you tax agent thus invoice would contain your company's details including reg. code as well as you tax agent's VAT code.

I see thank you.

The thing is my supplier, is a local asian supplier, they still doesn't have the arrangement for VAT in Europe. However, I would like to include all of the taxes in my selling price. So, can I put on my invoice that it's me (the seller as a Seychelles company) who will pay all the taxes ?

Thank you very much for your answers.

 

[AdamT1]

Yes you could, if your company gets a fiscal representative relationship in the EU.

Legally you could form a process where your company buys from your supplier and re-sell to you final customer, while logistics flow is that of your supplier delivering orders to your importer in the EU who in turn does all the tax payments.

 

[sarah233]

Thank you very much! Your answers are very much appreciated !

I did some Google search, it seems that there are many companies offering the service to be a fiscal representative. I don't know which one is good, liable and trustworthy with the cheap tariff. Do you have any suggestions for a company with these criteria ?

 

[sarah233]

Yes you could, if your company gets a fiscal representative relationship in the EU.

Legally you could form a process where your company buys from your supplier and re-sell to you final customer, while logistics flow is that of your supplier delivering orders to your importer in the EU who in turn does all the tax payments.

Thank you very much! Your answers really help.

I did some Google search, it seems that there are many companies offering the service to be a fiscal representative. I don't know which one is good, liable and trustworthy with the cheap tarif. Do you have any suggestions for a company with these criterias ?

 

[AdamT1]

Your cost will depend on volumes you are going to deliver to each separate EU country.