Avoiding EU VAT buying from abroad?

thenudeone

Retouch wrote: »

for instance, if my friend outside the EU purchased the item and had it delivered to his address (paying a lesser import duty than the german VAT) then sends me the item as a gift….Is that legal?

Export from Germany to Australia - no German VAT, but may be subject to Australian VAT (or equivalent) and / or Australian Customs Duty

Export from Australia to UK - will be subject to UK Import VAT and Customs Duty (if applicable to that product) regardless of whether it's marked as a gift

HMRC can and do open incoming packages and will assess their value for VAT and duty purposes if necessary. A piece of clothing or a music CD you might get away with, but who gives a business / professional training course as a gift?

Although you could be lucky and it could slip through without getting caught.

Personally, I'd just pay the tax which is rightfully due.

The EU VAT arrangements were put in place to prevent foreign companies (from wherever you are in the EU) having an unfair advantage by not having to charge VAT, which is a pretty sensible idea IMO.

JasonLVC

As others have posted, there isn't an ideal work-around.

The dominant supply is of goods, the training is ancillary to the supply. Place of supply of goods is where the goods are at point of sale (Germany). To achieve zero rating the goods would need to be exported, German VAT rules require proof of delivery so would have to be shipped to Australia for zero rating to be applied.

Australia would hit the import with Australia import duty and GST (VAT equivalent), goods would then be shipped from Australia back into the UK whereupon it would be subject to import duty and VAT again unless marked as a gift and even then depends upon the values involved.

If the German supplier treated the sale as two supplies of i) goods and ii) training on separate invoices/orders then possible to have the training element outside the scope of VAT as place of supply of services is where the customer is, customer is in Australia but the goods would still be subject to German VAT and suspect the supplier would not break the invoice down as they likely hide their profit margin between the goods and the training. factor in the shipping of goods from Australia back to UK, risk of UK challenging the gift values and cost of you going to Germany to do the training and its probably not worth the effort unless the values we're talking about are tens of thousands.

tizerbelle

Retouch wrote: »

The particular product in question requires the buyer to pickup the product/have a days training course for it's use

Before you even think about tax dodging, have you checked that they will allow a "third" party rather than the buyer to be trained in the use of the product?

pablakeman

Why doesn't everyone get off their moral high horse and stop giving snidey remarks? If you (understandably) believe this is fraud then jsut tell him straight and advise against! The point of this forum is to give people advice. If you believe the activity would be criminal, then I am sure the OP would like to hear this without being judged as a person.

laurel7172

The German company can't and won't give you the package VAT-free in Germany simply because it was bought on an Australian credit card.

The procedure for pickup (and you say this can only be picked up) is that you pay the full amount including VAT, then present the unopened item, the VAT invoice, your non-EU passport and your boarding card for your flight to Australia to the appropriate (airside) office at the airport in order to claim a refund.

Expect to have this refused if the invoice includes an undifferentiated amount for training delivered in the EU.

You will then have to pay Australian import duty on the way into Australia, and UK charges on your way home.

No, it isn't going to work.