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

    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.

    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?


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