The import VAT can be reclaimed in the specific country where it was paid. For example import paid during importation to the United Kingdom can be reclaimed in your UK VAT return.
In order to deduct the import VAT, the final import document from Customs (from your Customs agent) needs to be provided to us (please upload it directly to Mytaxflow in the same way you upload your transaction report). Your business is entitled to deduct import VAT if the business act as importer of record and as well that the import VAT had been paid by you. To determine whether the import has been paid by you, or by your buyer you can check the Incoterms:
- DDP - Stands for 'delivery duty paid', indicates the seller pays import VAT, ask for import document, upload it to Mytaxflow, we can include it in your VAT return calculation.
- DAP - Stands for 'delivery at place', indicates the buyers pay import VAT, these transactions are out of scope from your VAT calculation, because the import VAT was paid by your buyer.
In the UK, the Postponed VAT Accounting is also in place. Postponed VAT Accounting means that you will declare and recover import VAT on the same VAT Return, rather than having to pay it upfront and recover it later. You will need to get your monthly postponed import VAT statement to do this. Please let us know if you would like to know more details about Postponed VAT Accounting.