Exporting from UK to Europe

Question posted by Stephen Picken, on behalf of Elite TC Ltd in SY5

1. do I need license to Export E Ciggs from UK to Belgium, Holland, France Germany, Spain and Portugal and if so how do I obtain one
2. Should I pay VAT in UK for products I am exporting or in the EU country of sales
3. I have an Off Shore company in Gibraltar as a service and distribution company where I pay no personal or company or VAT TAX at all. If I use the off Shore company to do the export / import I have to pay UK VAT on export and VAT on import to the EU countries...so is it best to open an EU company in each country I export to and pay the local VAT and not the UK VAT
4. Is there a company that can assist with these questions and export / import so that I am legal and super tax efficient?

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Before you get started on what rules apply to your product you need to know how that product is classified in the EU. See https://www.gov.uk/classifying-tobacco. In essence if an electric cigarette is imported with a packet of cartridges, the whole set is to be classified together to commodity code 8543 70 90 99 as an electrical product not elsewhere specified. However, a nicotine cartridge containing a preparation of nicotine intended to assist smokers to stop smoking is classified to heading 3824 90 97.

Much depends on the make up of the cartridges e.g. how much if any nicotine they contain and what other chemicals they contain.

The normal system in the EU is that if the exporter is tax registered in the country of export and the importer is tax registered in the country of import then VAT should not be charged by the exporter. The importer would then self-report and assess his tax liability and depending on his business the VAT due may well be offset - in effect becoming non payable.

If the exporter is tax registered but the importer is not tax registered in the country of import then the exporter must charge UK VAT to the importer who will not be able to reclaim it.

If you (A UK company) are buying product from a UK tax registered company in the UK this is a local or domestic transaction and is subject to VAT. This is a separate transaction to your eventual sale to a customer somewhere else in the EU.

If you are exporting and your customer is importing you would not need to become involved in the VAT of the importing country. You need to ensure your choice of INCOterm reflects this.

A company registered in Gibraltar is not going to work well as the exporter from the UK - for it to be involved you would really need to be exporting from Gibraltar.

(T) 0784 1133027

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Baerbel Asare, on behalf of UK Trade & Investment Germany in Germany.

as Susan states in the previous post, ECiggs do not need to be licensed in Germany.

If you need any legal advice on the VAT front I will be happy to send you a list of German lawyers who will be able to help you. Just send me you email address and I will mail it to you.

Best regards


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Stephen Picken, on behalf of Elite TC Ltd in SY5.

Thank you Susan and Baerbel.

I spoke with the UK VAT office and as I am buying from UK and distributing in Europe then it is not classed as Exporting.....I can also claim Zero Rate VAT on purchase as I am a VAT registered limited Company in Spain and will be selling on to VAT registered companies throughout Europe.

I am now looking for Agents to distribute as partners to my company in Belgium, Netherlands, France, Germany, Spain and Portugal....any ideas as to how to attract Genuine, Dynamic, Driven to succeed entrepreneurs?

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While our Commercial Officers at UKTI France do not specialise in tax law, I can happily put you in contact with one of our specialists who will be able to help you. You might also be interested in the following information about commercial restrictions in the French market:

Commercial restrictions: it is illegal to sell e-cigarettes to people under the age of 18 in France. This is currently the only commercial restriction. However, the French government is in the process of putting together a law which will ban using e-cigarettes in public places (similar to the current law on cigarettes). There has also been talk of taxing e-cigarettes. Furthermore an EU directive, which will be included in French legislation, will mean that manufacturers of e-cigarettes have to apply for a marketing authorisation before the products can be sold in France.

If you would like to discuss the French Market further, I can provide some additional information free of charge. Feel free to contact me at jack.mcneill@fco.gov.uk and we can organise a phone call to discuss.

Jack McNeill

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Peter Beech, on behalf of TorFX in TR18.

Dear Stephen,

Many of my clients find LinkedIn an excellent resource for finding business agents for exactly this sort of requirement. Are you already "LinkedIn"?

If I can offer any other assistance please feel free to drop me an email Peter.Beech@torfx.com or call me on 01736 334695.

All the best


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