DDP INCOTERMS : WHO IS THE IMPORTER OF RECORD IN THE EU ?
In order to be able to reclaim import VAT paid in an EU country, your company’s name must be mentioned as the Importer of Record (IOR) on the customs clearance document issued in the country of arrival. A foreign company cannot act as the Importer of Record within the EU until it has obtained an EORI number from the Customs Authorities of one of the 27 EU Member States.
Brexit notice : Following the withdrawal of the United Kingdom from the European Union, as from 1 January 2021, UK companies willing to act as Importer/Exporter of Record in the EU must apply for a specific EU EORI number allocated by a Member State of the European Union (e.g. France, Belgium, Germany, Netherlands, Spain, etc.). An EORI number starting with “GB” and issued by the British customs authorities (HM Revenue & Customs) is no longer valid for customs clearance purposes in the EU and vice versa.
You must also pay a special attention to the details entered in the commercial invoice or the international shipping document. Here after is an example to help you to understand better how you should complete the shipper and the consignee details.
Example of a DDP shipment from the United States to France
Seattle Microprocessors Inc., a company established in United States* sells some electronic components to Durand Machines SA, a French company. The terms of delivery as agreed in the sale contract are DDP – Paris. This means that the goods will be delivered at the customer’s premises in Paris, already cleared for importation. Seattle Microprocessors Inc is the party bearing import duty and taxes in France for this shipment.
Note : The United States have been chosen as the country of exportation only for the purpose of this example. Therefore, the reader should understand that a company located anywhere in the world can export goods to EU countries under DDP terms.
How to enter the details of the consignee in France ?
The EORI number is a unique Customs identification number allocated to each company importing goods into the EU single market. In the above example, the EORI number to be used to clear goods in France should belong to the US exporter (i.e. Seattle Microprocessors Inc). It is not correct to use the EORI number of the French client Durand Machines SA because the latter is not acting as the Importer of Record. If your company does not yet have an EORI number, you can apply for one here: Get an EU EORI number (online application)
It is the company actually paying import duty and taxes which should appear here as the “Importer of Record” (IOR) or “Consignee”. Entering here the name of another company as IOR, even if it is the name final client, may result in the loss of the right to recover import VAT.