Indirect representation in Germany: A case study of success for UK exporters

July 12, 2024

The request

Fiscal IOR was approached by an established UK lighting company looking to import its goods into Germany. Its clients, two major retailers, wanted to install the lights, but unwilling to act as the Importer of Record (IOR) in Germany. They did not want to be liable for the import taxes and specified that the goods must be shipped under the DDP incoterm.

This created a problem for the UK lighting company. They could instruct an IOR to clear the goods in Germany, but then they would likely be unable to reclaim the import VAT, which at 19% made the proposition untenable. Another option would be to establish a company in the EU to act as the IOR, but again, this didn’t appeal due to the cost, complexity, and time required to set up an EU company. 

The solution

The lighting company consulted with their shipping company to explore possible solutions and were told that indirect representation might be an option. However, this proved to be a catch 22 as the shipping company’s German broker refused to act as the indirect representative, due to the associated risks. The lighting company appointed Fiscal IOR after finding us online. We explained how we could make it work and introduced them to our partner customs brokerage based in Dusseldorf. 

How it worked

The customs broker performed the customs clearance, ensuring all import taxes were paid correctly and the goods were released into Germany. The client cleared its goods in their own name (having DE VAT and an EU EORI), and we acted as the indirect representative. In doing so, we became jointly and severally liable for the import taxes for the next few years (another reason why the original customs broker didn’t want to get involved). Our client, with the assistance of international VAT specialist Fiscal Solutions, then reclaimed the import VAT. Our client has since grown their EU sales to £2 million per month and continue to work with us and the customs broker.

Fiscal IOR work with numerous UK clients to ensure their goods clear compliantly and efficiently. If your recipient won’t act as the IOR and the customs broker won’t provide the indirect representation, then we have the solution. 

Get in touch

Ready to streamline your import process and grow your EU sales? Contact us today to find out how we can help you navigate complex import regulations and ensure smooth customs clearance. Trust Fiscal IOR to be your partners in expanding your business in the EU market.

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