Exporting from UK, Delivery Duty Paid, VAT implications

Forum Categories INTERNATIONAL VAT ON CROSS-BORDER TRANSACTIONS Exporting from UK, Delivery Duty Paid, VAT implications

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  • #55746
    fullrespect
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    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!

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