What You Need to Know About VAT Rules as an Importer of Record (IOR) | GCE Logistics | Importer of Record & Logistics

What You Need to Know About VAT Rules as an Importer of Record (IOR)

If you are importing anything into an EU country from a non-EU seaport on your own or via an IOR service, your goods will be classified as ‘imports’ and will be subjected to a fixed VAT rate. The VAT rules and compliances are not easy to understand, particularly if you are working without the help of any experienced Importer of Record (IOR) services.

In this piece, we are going to discuss some elementary information that everyone needs to know regarding VAT rules while importing anything into any EU country.

Instance When VAT Goes to Zero

Yes, there is an instance where shipper or Importer of Record (IOR) doesn’t have to pay anything in the name of VAT. This happens when shipping items are being transacted in between two EU countries. Nonetheless, importers and IOR services need to meet certain conditions for that.

  • Both parties (IOR services and consignee) involved in the transaction must contain a valid VAT number issued by an EU member.

However, this is not the only requirement. You must also take care of these things.

  • The importer’s or IOR service’s foreign customer VAT must be verifiable through EU VIES system.
  • You must have tangible proof that the goods movements have happened across the border. This proof is usually furnished by Importer of Record (IOR) through goods transport documentation.

VAT Number Is Mandatory to Import Goods to EU Shores

There was a time when IOR services and individual importers can work without having valid VAT numbers. But now possessing VAT numbers have become mandatory for every importing entity. So, even if you are not looking for exemptions, you still need to have the VAT number so that EU customs can assess you for any tax liability.

Having a VAT Number in the Country of Import and Importer of Record (IOR)

Whether you should have a VAT number in the country of import, it depends on which country you are going to send your goods to.  There are many instances where an IOR service with a French VAT number needs to have a German VAT number if it is distributing the goods locally.

If you are thinking that even elementary information regarding VAT taxes is quite complicated, then get in touch with any experienced IOR services that can ship the items on your behalf as per the VAT rules and compliances. A seasoned Importer of Record (IOR) can also help you with securing the maximum VAT refunds.