Incoterms for VAT

Different Incoterms in the sales contract create different customs duty responsibilities. For example if the sale contract uses the incoterm ‘Delivered Duty Paid’ (DDP), where the seller is based in the UK and the buyer is in the EU, the seller will need to complete both the UK export customs declaration and the EU import declaration.

They will also need to pay the import VAT and any duty. This arrangement is also likely to lead to a requirement to register for VAT in that country.

But where the sale is on a Delivered At Place (DAP) basis the customer is the importer. And for sales on an ‘Ex Works (EXW)’ basis the buyer has to complete the UK export declaration as well as the EU import declaration.