Exports to countries outside the EU are called exports to ‘third countries’. You need to submit an export declaration for these and may need an export licence.
You might also have to pay custom duties and taxes in the destination country.
Export regulations vary, depending on the country you’re exporting to.
You need a commodity code for all exports outside the EU. The code classifies your goods for duty, tax rates and regulations, eg licences. The UK Trade Tariff allows you to look online for the commodity codes of the goods you export and import.
Sometimes you might need a licence for exporting goods to a country outside the EU. For example, agricultural goods or valuable antiques often need one. You’ll have to get the licence from the relevant government organisation.
Check if you need a strategic export licence for some controlled goods, eg military, defence or security related goods. This also covers dual use goods that can be used for both civil and military purposes, eg some software. You can apply for a strategic export licence using SPIRE.
If you want to export goods to a non-EU country, you must submit an electronic export declaration. You do this by:
- registering for an Economic Operator Registration Identification number (EORI)
- registering for the Customs Handling of Import and Export Freight system (CHIEF)
- submitting your export declaration through the National Export System (NES) which is part of CHIEF
Many businesses use an agent called a freight forwarder to handle these declarations for them.
Special rules apply if you’re moving goods via other EU countries before exporting them to a non-EU country. This is called ‘indirect exports’. Read more about exporting via other EU countries.
Paying VAT on exports to non-EU countries
VAT is a tax on goods used in the EU, so if goods are exported outside the EU, VAT isn’t charged. You can zero-rate the sale, provided you get and keep evidence of the export, and comply with all other laws.
The evidence you obtain as proof of export, whether official or commercial or supporting must clearly identify: the supplier, the consignor (where different from the supplier) the customer, the goods, an accurate value, the export destination, and mode of transport and route of the export movement.
You must make sure the goods are exported, and you must get the evidence, within three months from the time of sale. This can be longer for goods that need processing before export and for thoroughbred racehorses.
The time of sale is the earlier of:
- the day you send the goods to your customer
- the day you receive full payment for them
You must not zero-rate sales if your customer asks for them to be delivered to a UK address. If the customer arranges to collect them from you, this is an indirect export, so you may be able to zero-rate the sale as long as certain zero-rating conditions are met.
If you provide services to customers outside the EU, you normally do not charge VAT. However, if the service is used in another EU country, that country can decide to levy the VAT. In this case you can still deduct the VAT that you yourself have paid on your related expenses (goods/services bought in specifically to make those sales).
Paying duty on exports to non-EU countries
Duty charges are set by the country you export to and depend on the type of goods, where they come from and their value.
The UK Trade Tariff lists the duty charges, tax, custom rules and paperwork for exports to third countries.
You might be able to claim duty charges and VAT back or delay payments for some exports outside the EU.
This is called ‘duty relief’ and there are a number of schemes you can apply for. Some countries have trade agreements with the EU that allow you to export at lower or zero duty rates. In these cases you must usually be able to prove where the goods have originally come from. Read more about understanding Regional Trade Agreements.
It is important to check if there are embargoes or sanctions against exporting certain goods (eg military, defence or security related goods) to individual countries.
Know your legal responsibilities
- Do you need a licence?
- Get the right business insurance
- Comply with the law when providing goods and services
- Know your customers' rights
- Distance and online selling rules
- Understand pricing legislation
- Buying goods from outside NI
- Selling goods outside NI
- GDPR compliance checklist
- Pay your business rates
- Understand staff contracts and your responsibilities
- Taking on contractors and subcontractors
- What you need to do about health and safety
- Know your legal obligations on pensions
Understand tax and VAT
Sell and market your products or services