Hi Ilona, Mark and Tony.

Thank you so much for your answers. Now I have some good options to work.

Bianca

Dear Ilona,

Ireland is physically separated from the rest of the EU, and besides which, it has several VAT rates. However, it uses Postponed VAT Accounting (PVA), which simplifies import VAT arrangements.  For physical imports, it may not be the most ideal place to set up a company for the purposes of dealing with the rest of the EU.

I would also be inclined to look at Belgium or France because they have more beneficial VAT rates and they also use Postponed VAT Accounting (PVA) for their imports. The VAT Rate for France is 20%, while Belgium and the Netherlands have a main VAT Rate of 21%. The added advantage with Belgium is that it has a very efficient port system as well as efficient import controls. Furthermore, given that the Netherlands has a very efficient port and import system through the port of Rotterdam, this can be used very easily for imports into the EU, especially using the Article 42 facility to facilitate zero-rated Import VAT on consignments heading into the rest of the EU.

The Dutch Revenue website at http://www.belastingdienst.nl is easy to use, and this will help any trader wishing to establish a company in the Netherlands. Like Tony, I would be willing to assist in such matters, and in any case I speak fluent Portuguese, as my wife is Brazilian, and I know Brazil very well.

I hope this helps.

Mark

Dear Members,

I’ve received a request from our member Bianca Borghezan.

She works as a consultant for companies in Brasil and supports them to import and export.

Bianca’s client wants to know what is the best place in Europe to open a company. She considers Ireland to be a good place, but she does not know what the taxes are, what the obligations are, etc.

This company is a distributor of solar panels in Brazil and it already has clients in Europe, that is why it is planning to open a company in the EU to support these clients.

Can anybody support Bianca with these infos?

Thank you inadvance.

Best regards,
Ilona Mishchenko,
CKC Administrator

Dale

I am sorry for the long delay replying to your scenario.  As it happens, I have some experience of a similar problem.  The only approach I know of is to seek to avoid paying EU duty.  UK duty will always be payable.

The legal and administrative procedure that appears best, assuming that the Swedish company does not know in advance which of the imported products will ultimately be sold in the UK, is:

• Swedish company imports the goods into a Customs warehouse using procedure 7100.
• Shipments for the EU market are discharged from the warehouse with import declaration procedure 4071.
• Shipments for the UK are discharged with export declaration 3171.
• Import to the UK is a standard procedure 1000.  Duty is payable for origin China.  In the unlikely event that HMRC questions non-preferential origin, evidence of discharge from warehouse and/or re-export from Sweden should be available.

If the process of warehousing is not judged worthwhile or practical for operational reasons, the only other option I am aware of would be to tranship the goods out of temporary storage.  While this is legally possible, the organisation of it may be difficult, as goods would need to be sorted and redirected in a temporary storage facility.  Warehousing gives more flexibility.

Finally, there is the problem of returned goods.  These are most easily handled by establishing (perhaps by contract) a handler in the UK that could group such goods and send them either to the Swedish company or to the Chinese seller as appropriate.  I am aware that some online platforms are now prepared to give refunds without requiring the return of low value items.

Hope this helps.

Tony

Here is a request from Dale Fletsher.
Please share your thoughts in the comments.

IMPORT DUTY REDUCTION THOUGHTS PLEASE.

“A Swedish company has goods manufactured in China. The goods enter Sweden directly into free circulation in Sweden/EU, with no Customs Special Procedures being used. They currently add no value to the goods in Sweden/EU and have no desire to do so. The Swedish company sells the goods in the EU to retailers and direct to consumers, as well as direct to consumers in the UK through digital distance selling. These orders are fulfilled individually using Incoterms 2020 Delivered Duty Paid (DDP). The Swedish company now wishes to avoid the high costs involved in selling direct to consumers in the UK in this way, in particular the high accumulated import duty.

With all options up for consideration, your thoughts on the following options, and any others you may have, would be very much appreciated. My apologies to those I have already posed this question to, but it was suggested to me that a wider consensus on the matter could potentially be gained on this CKI forum. 1. Using ‘Transit’ and ‘Customs Warehousing’ Customs Special Procedures (CSP) from the point of entry into the EU, with delivery into a UK based 3PL e-commerce fulfilment house as long as Indirect Representation was in place in the form of Fiscal Representation. Alternatively, a sister company could be used in this way, or an independent organisation such as a distributor or a retailer. 2. Sell the goods to an independent UK company, with no legal or financial connection to the Swedish company either direct from the EU, accepting an EU and a UK import duty will be payable where CSP are not used. In this way the Valuation will be based upon the sale price to the independent company at the point of entry into the UK, not the sale price to the end consumer. 3. Order the goods in parts and assemble them in Sweden, changing their commodity code, thus claiming EU origin, which having previously checked the EU / UK Trade Agreement, may qualify the goods for zero import tariffs into the UK”.

Thank you!