Hi all,
I run a small Limited company, VAT registered, and we sell online. 75% of our sales are worldwide.
We are thinking about implementing DDP (Delivery Duty Paid), so we will collect the VAT appropriate for the destination country to show our overseas customers a final price without any surprises at the importing border.
so the example invoice for our customer will have 3 lines
1. Product sold price
2. VAT on the sale total (appropriate for the country)
3. DDP service charge
We use XERO for our bookkeeping.
questions:
1. How to account for the VAT collection of the foreign customer (for example, Parcelforce issue an invoice with a line: OUTSIDE SCOPE for VAT collected outside the UK)
2. I understand that the VAT collected is our cost, not a VAT reduction?
3. Any thoughts about optimizing this process to be tax-efficient?
Thanks!