UK / EU Trade and Cooperation Agreement (TCA)

#1

As you may be aware, the UK and EU have reached a Trade and Cooperation Agreement, which sets new terms of trade from 1 January 2021.

What does this mean for your business?

A new customs border is now in place between the UK and EU. People and goods crossing this customs border may be subject to additional checks. You can find more details on the UK government website, or through your local government website.

As communicated in July, Amazon is no longer able to move your goods across the UK/EU border. Pan-EU transhipments, cross-border fulfilment through EFN, and cross-border returns between the UK and EU have now stopped.

To protect your sales, we recommend that you send inventory to fulfilment centres in both the UK and EU. If you plan to move goods across the UK/EU border, you must ensure you meet the customs requirements for cross-border shipping in order to avoid delays.

You can find detailed information on our Help page.

As a reminder, the requirements for cross-border shipping include the following:

  • Registering for VAT in countries in which you are storing products. See our dedicated VAT Education pages for more information about your VAT obligations.
  • Getting EORI numbers – if you are using FBA, you will need at least 2 EORI numbers (1 for UK and 1 for EU if you are importing products in the UK and EU). If you are an MFN seller, you may only need 1 EORI number to do so (UK for UK sellers and EU for EU sellers). Please contact your logistics agent or tax advisor for further details.
  • Identifying the correct Harmonised System (HS) Codes for your goods and determining the level of duties that will apply to your products. For more information, see the following link.
  • Providing the country of origin (COO) information for your goods. See the official guidance to determine your product’s country of non-preferential origin.
  • Ensuring you’re ready to comply with both UK and EU product compliance, conformity marking, and labelling requirements (for example, marking your products with both CE and UKCA). In addition, gathering any necessary product compliance documentation.
  • Obtaining consent from EU IP rights owners (if required).
  • Deciding how to handle customs declarations, and engaging a Customs Broker where relevant.

In order for products to benefit from the zero tariffs, they must meet the specific rules of preferential origin established in the Trade and Cooperation Agreement (TCA) signed between the European Union and the United Kingdom. See the following link for further guidance on this point.

For more information, see the full Trade and Cooperation Agreement (TCA).

If you move goods between Great Britain and Northern Ireland (NI), you can find the latest HMRC guidance on the following link. Please work with your carrier to check the requirements that apply to you and ensure compliance.

We will continue to monitor and inform you of any updates on the UK government guidance on Brexit.

#2

With regards to shipping goods into Amazon FBA PAN Euro FBA warehouse, we are going to pick Germany as our Amazon warehouse as our point of entry for the PAN EURO programme. We are German vat registered.

Q 1.1 Goods with a country of origin of china which we have already imported into the UK and have already paid import duty on and import vat - when we bulk ship these goods into Amazon Germany FBA warehouse, we understand we will have to pay Import Duty again & Import vat. Can we claim back the import VAT on our Garman Vat return? In the UK we get a C79 and claim back / offset the vat paid on import on the UK vat return.

Q 1.2 we have, as said above, in effect paid duty on the item twice. Is there any way around this?

Q 1.3 Do Germany offer VAT deferment schemes for import VAT?

Goods with a country of origin of China - we are also shipping goods from our UK warehouse direct to European customers via FEDEX. We are using their Delivered Duty Paid (DDP) system so that the customer does not pay the vat & duty on delivery as per Amazon terms.

Q 2.1 Can we claim back the import vat paid to Fedex under the DDP on items that we are charged it on, i.e. over 22 euros? The link below suggests we can?

https://www.corintax.com/vat-refund-for-ddp-shipments-to-germany.html#How_import_duty

Q 2.2 I trust these seller shipped orders shipped from our UK warehouse to European customers via FEDEX using the Delivered duty paid (DDP) system will no longer be part of our VAT returns as we have already paid the VAT and duty if needed or are they duty free?

Q 2.3 Am I right in thinking that from the 1st of Jan 2021 only FBA sales from stock shipped from Amazon warehouses in Europe will be included and vat payable on our euro Vat returns going forward?

#3

Very good questions on shipping to amz fba germany.
I am sure the duty on non eu goods is non recoverable.

It would surely be logical that all the vat is recoverable.
What do your tax advisors say?

Regarding fedex and ddp. We use dpd.They clear customs in Netherlands for german goods, so 21 per cent vat applies and I guess you can only recover this if you are registered in germany

#4

Duty cannot be reclaimed of course VAT can as long as one is registered in the country that the VAT is charged. Yes we are looking at paying duty twice, once into the UK and then again into EU however I have been informed that there is something in place for goods that spend a brief time in the UK before going in to the EU or have significant re-working but I haven’t found any clarity on this yet.

I think this is unclear:

From what I’ve read this only applies if the customer orders on the Amazon site that they reside in, so if a customer in Germany orders off amazon UK that you don’t deliver DDP.

#5

Hi,
Please could someone give some clarity on the Trade agreement and customs.
We sell on European marketplaces, shipping from UK to EU countries (seller fulfilled). Amazon is now collecting the VAT on all of my sales, before this they used to send the VAT and only collect for B2B sales.
The goods we sell in Europe are relatively high value- between €100- €1000 orders.
I send with Parcelforce on a Euro Priority service, however since Brexit, this is now a DDP service, with a €5 customs clearance charge.
This means that all duties, customs clearance and customs charges are billed back to us.
They also have the more expensive (for the buyer and seller) shipping service of Euro Economy. This is a DUP service meaning there is a variable customs clearance charge, and customs and duties are billed to recipient prior to delivery.
If i sell an item for €360 (inc VAT) to a customer in France (20% VAT), Amazon will collect €60 and send me €300.
Does another 20% duties have to be paid on this?
With a DDP service, does this mean I will be liable to pay €60. If so, Amazon have already colllected the taxes on this sale, so where would this come from?
With a DUP service, does this mean the customer needs to pay another €60 (20%)?
I am really unsure and by the time I get by courier statement, I could already have a bill for ÂŁ1000s

Some clarity or help from someone with a better understanding would be great!
Thanks

#6

I also want to know the answer to this question, if you find out please let me know!

#7

What is needed is for amz to pay us for the item including vat, then we pay the vat to the courier.
I believe you can set the item to A GEN NON TAX STATUS . might mean turning off the vat cqlculation service but havent tried this yet
Anyone else tried this ?

#8

Hello! I am little confused about good sending into Fulfitment centres Germany. we have created shipment from UK to DE FBA. we use amazon partnered UPS for shipping.
What extra documents needed, and do you have any template?
products are not really sold yet, we ship to ourselves in Germany, so what do we write in invoice?

#9

Yes a commercial invoice. Remember to add your german and uk vat numbers plus your GB and EU eori numbers
You can upload all the hss codes etc on ups when you create label on worldship

#10

any editable templace for invoice?

#11

Hi,

You may need to read some of the other posts about this.


To confirm for us it is Seller Fufilled, shipping and storing from the UK, order to an EU customer, on one of the EU marketplaces.

I don’t believe Amazon are collecting the VAT at all. They are removing this from the sale. You would have to send to the customer DDP, so it means you would have lost the amount removed by Amazon and have to take that as a loss.

The way around this is to turn off Amazon VCS (Vat Calculation Services). Which is what we have done and it worked, which meant we got the full amount for the order. As VAT should no longer be charged to the customer since Brexit. Or some have said they changed the tax code of individual items (A_GEN_NOTAX), although some reported this still did not work after.

Hope this helps.

#12

We did this too and it sorted EU sales but messed up UK sales and stopped charging VAT on the UK. How have you gotten around this issue bud?

#13

Is this also on orders <€22?

#14

My tax advisor answered some of my queries which may/may not be helpfulfor some of you.?

  1. If a UK retailer buys products in the UK from a UK wholesaler who has had those products manufactured wholly outside of the EU (for example in South Africa), is the origin of the products considered to be the UK when the UK retailer resells them into the EU? Or, is the origin of the products South Africa and therefore customs charges will apply on UK retailer’s resale of those products into the EU?

A. Origin goes along with the goods unless substantial changes have been made to the product – so likely there will be customs duty on the products if they originate outside of the EU and if there is no existing free trade agreement with them.

  1. If a UK retailer sells its own brand products into the EU and it has had those products wholly manufactured outside of the UK/EU, does this mean that customs charges will be payable on the UK retailer’s sale of its branded products into the EU?

A. Yes

  1. If a UK retailer buys products from a Canadian wholesaler (and therefore customs charges have been paid on that purchase), when the UK retailer resells those products into the EU will customs charges be payable on those products (as they originated from outside of the UK/EU)?

A. In this case it should remain duty free where Canada is involved because both the EU and UK have a free trade agreement with Canada.

  1. If a UK retailer buys products from a wholesaler based in the EU (for example France), will that French wholesaler now start charging VAT on its products when selling them to UK purchaser?

A. No – if an export sale (ie outside of the EU) they should not be charging VAT at all to you. It also means that if you are selling outside of the UK you should not charge VAT and if sending to the EU you won’t have to do your EC sales declarations anymore. You will have other records to keep. If importing you will need to pay import VAT however but you can delay payment of duties for 6 months and you can apply for a duty deferment accounts thereafter I believe which means you pay the import VAT and duty once a month rather than at the time of import.

#15

Hi, well for us it hasn’t messed anything up as far as I can tell. All we have to do now is manually upload invoices, which is only for the business purchases and not many. Will look at automating at some point.

The UK sales seem fine. They show no VAT seperately now. But it is just inclusive in the price. We have our own systems in place for completing VAT returns and accounting.

#16

I am unsure what Amazon done for sales under <€22. To be honest I spotted it quite quickly on Jan 1st, so made the switch over after only a couple of orders came through.

But technically any sale under €22 would have no VAT due for now.

#17

What question is this related to? Is it a UK seller, selling on EU market from a UK warehouse?

#18

Ignore me…Stupid question, didn’t see the question just above it :relaxed::flushed:

#19

HMRC Help and Support have just issued a series of webinars you can sign up for, explaining all about importing and exporting to EU and all the new legislation and documents that are now needed.

#20

Hi,

Could you tell me where did you read that? I would appreciate if you can provide the link :slight_smile:

Thank you!