No more “First Sale” for EU customs valuation

The value of goods at the time of import is the key driver for the determination of the amount of VAT and customs duties payable.

According to Tradewin.net, the doctrine of the “first sale” means that the importer can declare the goods to Customs using the ‘first sale’, which is the transaction between the manufacturer and the middleman (vendor), which excludes the middleman’s markup, thereby lowering the customs value of the goods and the amount of duties payable.

In other words, First Sale for Export establishes the dutiable value based on the transaction between the manufacturer (factory) and the middleman (vendor) instead of between the middleman and the Importer.

See for more here: http://www.tradewin.net/services/duty-mitigation/what-is-first-sale.asp

Under new EU rules, only the sale that takes place immediately before the goods are physically brought into the territory will qualify.

My friends at PWC’s Customs team write:

“As a result, this interpretation will lead to the potential abolishment of the use of earlier or first sale whereby many EU importers for decades have been benefiting from basing the calculation of duty due on a sale that took place before the last sale upon which the goods entered the customs territory of the EU. However, based on this wording, if Customs were to take a restrictive reading and interpretation of the phrase “immediately before”, even instances where there is only one sale upon which the goods entered the customs territory of the EU, challenges could arise.”

They also note that rules are (still) very confusing. See for more information the pdf linked below:

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GST on e-business sales to Australia

If you are selling downloads (movies, games, audio etc) to individuals in Australia, make sure to follow the new Budget in Australia which is due to be released on May 12. It may contain new rules for non-residents (read: US companies) to account for Australian GST on sales of downloads.

The GST rate there is currently a relatively ‘friendly’ 10%.

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In Nederland van 5 – 10 mei

A quick PSA for my Dutch readers:

Ik ben in Nederland van dinsdagochtend 5 tot en met zondagochtend 10 mei, voornamelijk voor client meetings in de Randstad.

Als het lukt met mijn schema, dan zou ik het leuk vinden om eens met VAT Blog lezers af te spreken – laat eens van je horen!

Mijn email is mark@us-vat.com.

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Deloitte’s VAT Refund Guide 2015

You may want to download this pdf for use now or later. Note the deadlines – authorities ruthlessly reject late submissions.

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VAT Conferences!

I know that it is a little early in the year, but I received word of a couple of conferences that you may find interesting.

First off, I will be speaking in a free webinar on April 28 – I posted this earlier on the VAT Blog, see here: http://www.us-vat.com/blog/?p=961.

Next, I am one of the speakers at PWC’s Asia Pacific Indirect Tax Conference, from May 26 – 28 in Singapore. See here for more: http://www.pwc.com/sg/en/tax-symposium/indirect-tax.jhtml. This is a joint Global Tax / VAT / Customs conference – I am looking forward to participating!

Meridian is doing a conference in Munich on June 11 and 12, see here for more information: http://www.kmlz.de/sites/default/files/2015-06-11%2B12%20Flyer%20VAT%20Conference.pdf

Finally for now, as I noted earlier, I am toying with the idea of heading to the Annual IPT Conference in San Diego, CA to pick up my “VAT Article Of The Year Award”. Dates are June 28 – July 1. Erik van der Hoeven (EY Seattle) and James Capobianco (PWC Vancouver) are speaking there – see the program linked here: https://www.ipt.org/iptdocs/Files/ProgramBrochures/2015ACBrochure.pdf

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IPT’s VAT Article of the Year

I love awards. They exist only to celebrate and motivate people, and generally speaking they simply work. Back when I lived and worked in Singapore, I used to gaze in awe at the endless presentations of the “Auditor Of The Year Award”, “Best Transfer Pricing Adviser” and so on during semi-annual gala staff get-togethers.

And even now, emailing with my friends and network partners in Asia, I marvel at their email signatures, that contain texts like:

“Recent awards for PwC Singapore:

Singapore Accountancy Awards 2014 – Practice of the Year, Technical Excellence, and Excellence in People Development for Large Practice

Acquisition International 2014 Finance Awards – Risk Assurance Practice of the Year

Singapore’s 100 Leading Graduate Employers Awards 2014 – Graduate Employer of the Year (for the fourth consecutive year)”

Here is the U.S., people are partial to awards too. Whether it’s a Big 4 partner conference or a software vendor’s annual seminar, not a single opportunity is missed to put someone in the limelight and spend a moment to celebrate anything.

And now it’s my turn!

The IPT (the Institute for Professionals in Taxation) is “the only professional organization that educates, certifies and establishes strict codes of conduct for state and local income, property and sales & use tax professionals who represent taxpayers.” It has 4400 members.

IPT ran my article “VAT for US companies” in their December 2014 publication. I have been notified that “the Institute is bestowing upon you the 2015 VAT Article of the Year Award for your article entitled, “Value-Added Tax for U.S. Companies”, which was published in the December 2014 issue of IPT’s Tax Report.”. Love it. Sounds like a knighthood.

Please see the article in pdf linked below (page 7).

I might even go to IPT’s Annual Conference to pick up the award in person. Let me know please if you plan on attending as well.

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Imports in France and Spain

I don’t often hear from BDO, but they recently published an overview of the new French import simplification. Similar to the Dutch reverse charge on imports (the so-called article 23 license), France now allows importers to forgo paying VAT at the time of import, but rather account for the import VAT on the next VAT return.

On that VAT return, the import VAT must be reported, but can be reclaimed as input VAT on the same VAT return. No cash changes hands, no waiting for a refund, so that is all good. The same applies to non-resident importers – i.e. U.S. companies that rent a warehouse in France and import their own goods.

But wait! – for these non-residents, cash flow gets even better because on a French domestic supply (for example after the import) once again a reverse charge applies. So again no VAT. Excellent solution for French imports – but please note that there are the obvious regulatory and compliance requirements.

BDO also reported on the new Spanish import rules.

Both articles are on page 4 of the pdf linked below.

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