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Tax implications of UK business selling to Germany

UK business selling foreign manufactured products to EU country

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I would very much appreciate your help with the scenario below:

The company is based in the UK where it has an office, a warehouse, and employees. The company wants to set up a new arm of the business, which sells paints etc for decorating.

The product is manufactured in Italy, and they want to start selling to Germany.  The finished product will be transported directly from Italy to Germany, where it will be held in an Amazon warehouse and sold online through Amazon.

Supplier invoices will be paid in the UK through a UK bank account.

Sales invoice will be raised in the UK. Transport is all within the EU.

What are the basic tax implications on such a set up please?  Would there be excise duty, etc?  Any corporation tax peculiarities?  VAT? customs clearance, etc in the UK?

Thank you!

Replies (2)

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By paul.benny
16th Sep 2021 11:43

The Brace for Brexit articles on here provide an excellent guide to the world of VAT after leaving the EU.

What you're describing wasn't entirely straightforward pre-Brexit, now we've taken back control, it's rather complex and you should get some proper paid-for advice.

For a start you'll almost certainly need VAT registration in Germany, and you may need to register in other member states. Selling via amazon is probably both a help and a hinderance.

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Jason Croke
By Jason Croke
16th Sep 2021 12:12

There are multiple things to consider here and they all need to be considered as a whole and then solutions come from that, perhaps a bit too much to expect from this forum, but the "Brace for Brexit" articles are a good starting point.

As a starter, if selling via Amazon Germany, then you will likely need a German VAT number, the Italian supplier can then reverse charge the goods from Italy to Germany. No excise duty or clearances because it is all Intra-EU.

The sales don't go on your UK VAT return, but they are still turnover/sales for the UK entity, the German sales are reported on the German VAT return, not the UK return.

Amazon offer EU VAT registrations and VAT returns for a stupidly low price, more details here

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