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Selling in Europe with Incoterm DDP. Eurofiscalis handle your VAT registration & declarations | I want to learn more

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VAT Expert in Europe

Selling in Europe with Incoterm DDP. Eurofiscalis handle your VAT registration & declarations | I want to learn more

Selling in Europe with Incoterm DDP.

Eurofiscalis handle your VAT registration & declarations

I want to learn more

Belgium

Import with DDP to Belgium

In the dynamic world of international trade, a nuanced understanding of the various terms and conditions that govern the movement of goods across borders is indispensable. In this article we are focusing on importing goods to Belgium with the DDP Incoterm (Delivery duty paid). We are explaining what the DDP Incoterm entails, why it could be a good choice for your imports and what you should remember about when using it, when it comes to your VAT obligations in Belgium.  As we unravel the layers of import with DDP to Belgium, our aim is to equip businesses with the knowledge needed to make informed decisions, mitigate risks, and optimize their international trade operations.

Importation DDP en Belgique
Table of Contents

What are incoterms ?

Incoterms, short for International Commercial Terms, are a standardized set of trade rules established by the International Chamber of Commerce (ICC) that define the responsibilities and obligations of buyers and sellers in international transactions. These terms provide a common language for parties involved in the global supply chain, specifying who is responsible for the costs, risks, and logistics at each stage of the shipping process. Incoterms are reviewed every 10 years, and the incoterms currently in force are those from 2020.

 

Import with DDP to Belgium : what is the DDP Incoterm

Among the Incoterms, the DDP (Delivered Duty Paid) Incoterm stands out for its comprehensive nature.

In a DDP arrangement, the seller assumes maximum responsibility, covering all costs and risks associated with delivering the goods to the buyer’s specified location in the destination country, in this case, Belgium. The seller takes care of not only transportation and freight charges but also customs duties, taxes, and any other expenses until the goods are delivered at the agreed-upon destination. On the flip side, the buyer’s responsibilities are minimal, typically limited to receiving the goods at the designated location.

The DDP Incoterm, therefore, offers a turnkey solution for buyers, streamlining the import process by placing a significant burden on the seller to ensure a smooth and hassle-free delivery experience for the buyer.

DDP Incoterm

Advantages and disadvantages of using the DDP Incoterm to import goods to Belgium

Using the DDP Incoterm to import goods to Belgium as a seller may come with many benefits as well as inconveniences. It is important to consider both before deciding on the right Incoterm for your import to Belgium.

Advantages of using the DDP Incoterm for Sellers:

Disadvantages of using the DDP Incoterm for Sellers:

What are the conditions & responsibilities for importing with DDP to Belgium

When a seller chooses to use the Delivered Duty Paid (DDP) incoterm for importing goods into Belgium, it means that the seller is responsible for delivering the goods to the buyer at the agreed-upon place of destination in Belgium, bearing all costs and risks, including duties and taxes.

 

Here are the key conditions and responsibilities for the seller in a DDP arrangement for importing goods into Belgium:

1. Delivery and Transportation:
2. Customs Clearance:
3. Duties and Taxes:
4. Risk Transfer:
5. Insurance:
6. Delivery Obligations:
7. Communication and Cooperation:
8. Compliance with Local Regulations:

It’s important for the seller to carefully review the terms of the sales contract and clearly understand their obligations under the DDP incoterm. Additionally, consulting with logistics professionals and legal experts with knowledge of Belgian customs procedures can help ensure compliance and mitigate potential challenges.

Do you want to learn more about your obligations as a DDP importer in Belgium?

Schedule a free consultation with our expert 

Customs clearance for non-EU companies

Non-European companies may encounter problems with DDP customs clearance.  In order to appear as an importer on customs documents in box 8, these companies must work with a customs agent offering indirect customs representation. A Belgian VAT number via a responsible representative is therefore not always sufficient.

Import with DDP to Belgium: Direct representation for EU companies

  1. In direct representation, the declaration has been drawn up by a customs agent, acting in the name and on behalf of a third party.
  2. The choice of direct representation appears in boxes 14 and 54 of the import document
  3. The identity of the customs agent appears on the document in box 14
  4. The importer’s identity appears on the document in box 8.

Import with DDP to Belgium: Indirect representation for non-EU companies

  1. In indirect representation, the declaration is drawn up by a representative (customs agent) acting in his own name and on behalf of company XYZ established outside the European Union.
  2. The choice of indirect representation appears in boxes 14 and 54 on the import document
  3. The identity of the representative appears in box 14 on the document;
  4. The identity of the non-EU company XZY appears on the import document in box

Import with DDP to Belgium vs VAT compliance: case studies

In order to help you understand how importing with DDP incoterm to Belgium may impact you when it comes to VAT Compliance in Belgium, we have prepared two case studies of different types of transactions. We are explaining which import procedures would be best for you and how to handle import VAT payment.

Import and sales of goods in Belgium

Business model : A German company ABC imports shoes to Belgium, stores them in a Belgian warehouse and sells them to consumers in Belgium (both B2C and B2B sales).

 

VAT rules for importing : First and foremost the company ABC will have register to VAT in Belgium. The correct import procedure to use is the procedure 40 00 which is the standard import procedure used when the goods are released for consumption in Belgium. The company ABC will need to pay import VAT tax (in this case the applicable rate will be 21%) together with the customs duties. This import VAT will be recovered by the company after filing a periodical VAT return in Belgium.

 

The company ABC has the possibility to defer the payment of import VAT tax by using the License ET 14 000 – this way they will not have to pay the import VAT tax at the time of the import, they will only need to declare it in their periodical VAT return. To learn more about the License ET 14000 read our article : ET 14000 license : Import VAT deferment system in Belgium

Import to Belgium and Intra-community sales

Business model: A Czech company XYZ imports furniture to Belgium and then resells them to other companies in EU countries. The goods that will not be sold will be moved to the company’s warehouse in Czech Republic. None of the goods will stay in Belgium

 

VAT Rules for importing: Company XYZ will register to VAT in Belgium in order to be able to import goods. They will use import procedure 42 000 that will allow them to defer the payment of Import VAT. By using this procedure, company XYZ will be obligated to move the entirety of goods outside of Belgium in the next 30 days after import. They will also need to indicate VAT numbers of the companies the goods will be sold/transferred to.

 

The company XYZ will need to file periodic VAT returns in Belgium and declare the imports as well as the Intra-community sales. No VAT will be paid or recovered.

Import with DDP to Belgium: Conclusion

As you can see, importing goods to Belgium using the DDP Incoterm may be very beneficial to companies selling goods in Belgium and the European Union. However, it does come with its challenges therefore it is crucial for businesses to carefully asses their business situation and responsibilities that come with Importing to Belgium with DDP incoterm. We hope that our article helped you a little bit with understanding those. As always we are eager to help businesses make informed decisions so do not hesitate to get in touch with us and schedule a free consultation !

 

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Rising VAT rockstar at Eurofiscalis I have a passion for unraveling the complexities of VAT regulations in the European Union (especially Benelux region). My mission is to empower readers to navigate the ever-changing VAT landscape with ease and to answear your questions in a clear and concise way.