VATLive > Blog > Europe > Brexit UK-EU B2B switch to Delivered Duty Paid DDP Incoterms

Brexit UK-EU B2B switch to Delivered Duty Paid DDP Incoterms

  • Jan 22, 2021 | Richard Asquith

Since 1 January 2021, the end of the Brexit transition period, B2B businesses are switching their commercial terms (‘Incoterms’) of cross-border losing business. Failing to do so will certainly cause delayed deliveries and an end to repeat business. 

There are two most popular commercial terms – known as Incoterms – for cross-border sales are: 

1.     Delivered Duty Paid DDP, in addition to organising full transport to the customer’s site, the seller takes care of all the post-Brexit VAT and customs bother for the import. A great customer experience; but you’ll have to manage the paperwork and taxes. In the case, you have become the Importer of Record and customs declarant.

2.     Delivered at Place. DAP, the seller only transports the goods to the port (seaport, train or airport of departure); the customer has to pay import tariffs and VAT. Much easier for you as the seller; but your customer won’t appreciate the extra costs and most marketplaces will block you. 

Contact Avalara for FREE guidance on how this works, and help with some of the challenges listed below.

UK suppliers in particular are fast moving to DDP because they fear losing EU customers to EU-resident suppliers who do not face the new customs declarations, potential tariffs and import VAT charges. But this can bring many admin and import tax challenges:

The picture is the same on B2C where marketplaces are forcing sellers to go DDP on distances sales and own, foreign held stock business model.

Explore more content like this in our Brexit hub

Need help with your UK VAT compliance?

Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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