Can someone help me understand VAT rules on vintage watches which will be exported to the USA? Does it differ if sold from a private individual vs a company?

I have a bunch of experience importing new products from various EU countries and I always get VAT zero rated. I have come across conflicting information on collectibles such as vintage watches. I have been told by sellers that they can't adjust VAT at all and have read anecdotal evidence that the exporter should charge VAT only on the difference between the original purchase price and the price they are charging the second customer.

Any help is appreciated.

 

I assume you are VAT registered ?

 

I am an individual in the USA where there is no VAT

 

I don’t think you would have to pay VAT on a watch imported from Europe (or rather I don’t think the seller would have to collect VAT on a sale outside the EU). But you may have to pay import tariffs assessed by customs to Uncle Sam.

 

Regarding the sender there is not difference in what it is his fiscal entity. What can add additional charges, is as it follows

If you are just a private entity:

-below 2,5k of declared value by the sender, there is no additional taxes (is considered personal object, although you might read online that some people have been charged a 3%~6%.)

-above 2,5k of declared value by the sender there are import taxes. Depends on the watch and you can calculate it on the website of the US customs (there are also other websites where you can do the same, just google “import watch USA customs”)

As you might imagine, the sender can declare a lower value of the watch to be below the threshold, but this adds additional risks in case the customs might inspect your pack.

If you have your own company and you want to bill it there, you might wanna contact the customs. I cannot support you in this and I imagine is quite complicated.

Hope it helps

 

I'm going to agree with this. At least from my corporate experience point of view, the export of goods from the EU is outside the scope of VAT so there should be no VAT charged by the seller. Import taxes are a different issue though. And you would still have to self-report the use tax to your local jurisdiction.

 

If the item sent to the U.S. is above $800 you’ll be assessed customs import duty. Depending on how it’s shipped (FedEx, UPS vs National Postal Service) the company may pay it and then bill you when they deliver it. You should be exempt from VAT by the shipper since it’s leaving the EU but you’ll have to deal with you’re own duty issues on the import side.

 

I find that EU companies typically use DHL, cheaper rates and the ones I had imported will be held up in customs until a self reporting form if completed, which is then used to levy customs fees which need to be paid before US customs will release

 

If you are collecting the watch from the dealer in the EU, he will have to charge you VAT because it is a domestic transaction. You would then reclaim the VAT when you take the watch outside of the EU.

If he is sending the watch to you outside of the EU, he should not be Charging you VAT as such sales are zero rated.

 

Unless he bought it from the states and paid VAT on import, and is now selling it for price and VAT as he had to pay it

Had a similar experience as above member in US sold watch for $400 buyer paid $400 + $80 vat and I bought for $480 a few months later. Killer watch so just bit the bullet
( prices just used for easy explanation)

 

It's a bit complicated !
Different countries in the EU have slightly different schemes, but often you may find that a small business may not be registered for VAT, so they don't charge it to anyone.
What you have been told about "VAT on the margin" schemes is also correct. These are schemes where the seller is registered for VAT, has bought an already used item, and is liable to hand over tax based on the difference between what they bought for and what they are now selling it for (similarly, a lot of traded in used cars are taxed on this basis). In this case everyone pays the same "inclusive" price irrespective of where you live, as you, the buyer, never see the tax amount and there is no ability for any buyer to reclaim it.
The simplest situation is for a new watch purchased from a VAT registered trader, where they will either not charge VAT in the first place to customers outside the EU, or if it is charged you can claim it back. This is what you have experienced.

Best to check with the seller before you commit. They aren't (necessrily) being dishonest with you if they say they can't reduce it by the tax amount.

Edit - just to complicate it further, there are also schemes for low turnover businesses where they pay tax not on individual sales, but are assessed on a proportion of their turnover. They don't charge VAT on individual sales as a result, so they can't "not charge" it or refund it even on new products. You may find there are some startup/micro brands who are in this situation.

 

Bravo. you kept it simple
I would need a lot more words to explain it better.

 

New watch: VAT which you register for recovery at transaction. Or need to file for.
Vintage Watch: No VAT

Upon entry to USA: You will need to pay duty on the watch.

Generally the first time you use DHL or Fed Ex they will need some additional info at customs. DHL will ask for a credit card and Fedex just bills me. Once in the system for Fedex at least hang ups are few and they are way better at cutting through customs red tape. Personally my last experience with DHL was not a good one. Too many transfer points, took too long, their customs Process was inefficient, and I had to drive to the airport to get my watch. Fedex is like a knife through butter. Make sure your shipper does the paperwork correctly or all bets are off.

 

Thanks for all the responses. I am a simple man and if I have to pay EU VAT & US import taxes I pass. I have missed out on some nice watches but I guess there are plenty of fish in the sea so to speak.

@Larry S I have also had the least favorable experiences when importing with DHL vs other carriers. Ironically, USPS has been the best for me but obviously YMMV.

 

USPS and Royal Mail lost a package for three months and were positively inept. So no ... it will be a cold day in hell before I use any postal service for anything valuable. (And yes ... you are cutting off access to some very nice watches by not wanting to pay tax and duty)