What are the rules about duty for a UK Company selling products made in the EU to USA?

Question

Hi,

We are considering setting up a made-to-measure shirting business in the USA. Customers will place orders with a US based independent sales agent. Once the order is made, it will be processed/manufactured in Poland. On completion of the garment, the factory will ship the order directly to the US. Revenue from Sales will be collected by us here in the UK ( invoice for the customer), while we will be paying Sales Commission to the US agent and cost of manufacturing to the Polish company against their respective invoices.

What are the VAT , local US state tax, repercussions for this set up? I look forward to hearing back soon.
best
Hasan

Answer

Hey there Hasan,

It sounds like the place of supply is going to be the UK and as the goods are ‘exported’ from the UK (though not physically) you can treat your documentation and taxes largely as if they were (though you will still have to declare that the goods are made in Poland).

As an export your goods and your freight invoices I would have thought would just be VAT zero rated though I would have thought your invoices from Poland would be invoiced through the VAT reverse charge scheme.

For local info on US taxes etc, you are best speaking to someone in the US who knows the local procedures – can depend on a few factors such as: ‘mode’ of transport, value of goods, exact nature of goods etc.

If the goods are low value and you’re just sending out small items (typically <25kgs chargeable weight), the simplest and most effective way to ship will probably be through a courier so they might be a good one to ask 'what exactly would you need from me / how does it work when the goods arrive in the US'?

If you’re shipping by ‘air’ or sea, then the process can differ quite considerably – but hopefully this helps you on your way to finding the information you were after?

I don’t have direct experience working as an exporter so please don’t take my word as gospel but to the best of my knowledge what I have said is true.

Best of luck! And once you’ve spoken to a few people I think you will realise it’s really a lot simpler than it perhaps seems.

Good source of info for reference: http://madb.europa.eu/madb/datasetPreviewIFpubli.htm?datasettype=prod

Regards,

Simon

Answer

thanks Simon,

Answer

Dear Hasan Mustafa,

 

Thank you for your query concerning shipments to the USA.

 

You should contact the customs authorities in the USA for advice concerning import duty/tax on imports.

http://www.cbp.gov/

 

Yours sincerely,

R White

HM Revenue & Customs

Customs, International Trade & Excise

Website: www.hmrc.gov.uk/contactus

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