We are a Japanese company importing goods from the UK to Japan. With one of our sellers, we decided to receive the goods with delivered duty paid (DDP) terms. We are paying a price VAT-inclusive (according to their price list - VAT is not specified on the invoice). So, basically, we are paying for VAT in the UK I guess, and also paying Japanese VAT when we receive the products here. In relation to the terms in the DDP, isn't the seller supposed to pay the VAT in the UK? Is it normal that we have to pay for their VAT with DDP terms?
Arthur Weller replies:
If the sale is on DDP terms, then, by definition, the seller should pay all and any tariffs and taxes. This should be relevant to Japanese VAT. Furthermore, under normal circumstances, there is no UK VAT charged when exporting from Great Britain to a destination outside the EU; see HMRC’s guidance.