Business tax – guidance

Exporting goods outside the EU

Customs requirements, duties and VAT you must pay to export goods to a 'third country' outside the EU.

Introduction

If you export goods to countries outside the EU (known as ‘third countries’), you must have the appropriate licences and make export declarations to customs through the National Export System (NES). You must also make sure that VAT, import taxes and duties in the destination country are paid where necessary, and follow transport procedures, though this is normally the responsibility of the importing person or company. There are a number of export procedures, such as duty relief schemes which can benefit businesses.

VAT on exports and other taxes

When a third country receives your goods, it may charge duty. A third country may also charge their own equivalent of VAT or purchase tax.

Zero-rating your goods

You can usually zero-rate goods you’re exporting out of the EU as long as you:

  • ensure they leave the EU within set time limits (typically 3 months)
  • keep satisfactory evidence of their departure
  • hold sufficient evidence from your accounting records to prove that a transaction has taken place
  • keep official evidence of export - either the Goods Departure Message for goods leaving the EU direct from the UK (direct exports) or, for goods leaving the EU via other member states (indirect exports), an Export Accompanying Document (EAD) - the EAD must be stamped by customs in the last member state where the goods exit the EU - the office of exit

Ultimately, the VAT treatment will depend on whether you’re exporting the goods directly or indirectly, when you organise delivery and when your customer arranges collection.

Common Agricultural Policy (CAP)

If you export processed foods or agricultural goods covered by the CAP, you may be entitled to a refund or required to pay a levy. You may also have to apply for a licence to export certain goods above a defined quantity.

Origin Rules

Even if your customer is responsible for paying duty on the goods in the destination third country, you need to provide the right documentation. Third countries may have import duty regimes in place, but in some countries your exports may qualify for a reduced rate of duty or be classed as duty free. You’ll need to provide evidence of the product’s origin to claim the benefit.

The Tariff

The Integrated Tariff of the UK (the Tariff) is the official HM Revenue and Customs (HMRC) guide to importing and exporting taxes and duty. The Tariff contains the codes and customs requirements you need for import and export paperwork.

Find commodity codes and other measures applying to imports and exports by accessing the online UK Trade Tariff tool.

Ultimately, third country duties are based on the type of goods you’re exporting, their origin and their value, all of which are subject to change in the destination countries. In addition to the Tariff, you can also check with UK Trade and Investment or the destination country about what taxes are to be paid and whether the exporter or importer is obliged to pay them.

Export licences and other controls

Exports of some goods are controlled. You may need to apply for a licence, or comply with specific regulations.

Weapons and other goods and technologies with a potential military use may require an export licence from the Department for Business, Innovation and Skills (BIS). If goods are to pass through more than one country, you’ll likely need a licence for each transit country.

All military controlled items and some highly sensitive dual-use goods need a licence, even if the export is made to another EU country. Some may be subject to sanctions or embargoes with total or partial bans on exporting such goods to named third countries.

Less sensitive controlled dual-use goods exports need a licence if shipped outside the EU.

Controls also apply to the brokering - which can include warehousing and shipping - and transport of dual-use goods. In addition, UK nationals who trade outside the UK in strategically controlled goods between overseas countries may need a trade control licence through the UK.

There are wider restrictions on exports to countries subject to sanctions. You can find guidance on sanctions, embargoes and restrictions and read about strategic export controls in the guide to the Export Control Organisation (ECO).

Use the ECO Goods Checker to check if items are controlled.

Agricultural products and processed foods typically require a Common Agricultural Policy licence from the Rural Payments Agency. They may also be subject to a refund or a levy.

Exports of valuable antiques and works of art may need a licence from the Export Licensing Unit of the Arts Council.

Exports of dangerous chemicals outside the EU may need to be notified in advance to the Health and Safety Executive (HSE) and BIS. Businesses that trade more than one tonne of chemicals a year must register with the new EU chemical management agency REACH, based in Helsinki.

Live animals, meat and plants may need licensing and health inspection from various UK-based government agencies before your goods reach their destination.

Other products subject to export controls or licensing requirements include medicines and controlled drugs and the chemicals used in their manufacture, rough diamonds being exported out of the EU, exported waste and certain species of fish, which may be subject to a ban or quota. Your trade association may be able to advise on export controls applying to your products.

Export declarations

When you transport goods out of the EU with the intent to permanently export those goods, you must first submit an electronic export declaration via the NES, part of HMRC’s Customs Handling of Import and Export Freight (CHIEF) system. Exceptionally, a paper export declaration known as a C88/ESS may be used for, for example, commercial goods carried in a passenger’s accompanied baggage or vehicle (Merchandise in Baggage). Goods can be exported as direct or indirect exports out of the EU. Indirect exports (being those moving from the UK but exiting in another member state must be accompanied by an Export Accompanying Document (EAD)).

You’re not generally required to complete an export declaration for goods being sold within the EU. There are exceptions, for example sales to international organisations, which are treated as exports and exports to special EU territories.

When you export goods out of the EU to third countries, you can usually zero-rate the goods for VAT purposes.

Direct exports are goods that are exported from the UK to a destination outside of the EU. The UK acts as the customs office of export and exit.

Indirect exports are goods exported from the UK that are exiting the EU from another member state. The UK acts as the customs office of export and the other member state is the customs office of exit. Under current EU legislation indirect exports must be accompanied by an EAD to the customs office of exit. The EAD contains the Master Reference Number (MRN) and bar code of the consignment of goods and must be presented at the customs office of exit with the goods before leaving the EU.

Union Customs Code (UCC) legislation is in force from 1 May 2016. Under the UCC when an indirect export is presented at the customs office of exit the person presenting the consignment must provide the MRN of the export declaration. There’s no obligation to provide a paper EAD.

There’ll be a transition period up to the year 2020 for businesses and UK to fully implement the requirements of the UCC legislation and its related IT systems. During this transition period you should continue to take a paper copy of the EAD to the customs office of exit to enable your goods to be exited from the EU.

How to make the declaration

You will need to have an Economic Operator Registration Identification (EORI) number and register for NES, which you can then access via:

  • email - not to be used for CAP declarations
  • a web form
  • XML
  • Community System Provider (CSP) and software houses
  • a paper declaration that HMRC staff will input for you in exceptional circumstances

You can use an agent, for example a freight forwarder, to make the declaration on your behalf. This can make exporting simpler and faster if you’re not authorised to make electronic declarations yourself.

See the following guides to give you the full detail on how to register for and use EORI and NES:

The declaration allows HMRC to check that you’re complying with export controls, for example licensing requirements, duty and VAT.

Traders must classify their goods as part of the declaration, including a commodity code and a Customs Procedure Code (CPC). A CPC identifies the nature of the movement of exports. It also describes the purpose of your shipment and informs HMRC about the duty liabilities on the goods. Volume 2 of the Tariff contains a full list of commodity codes and volume 3 contains details of CPCs. You must also provide a reference for the goods, known as a Unique Consignment Reference.

Find commodity codes and other measures applying to imports and exports by accessing the online UK Trade Tariff tool.

Incoterms (internationally recognised trading terms) clarify the obligations of exporter and customer as to who bears the costs of international transport and auxiliary services and responsibility for presenting documentation. For example, the Ex-Works Incoterm places minimal duties on the seller.

Safety and security regulations require you to pre-notify goods due to leave the EU within set time limits ahead of their departure. You’ll be covered if you complete normal export declarations, but if you’re not declaring them in the usual way, you must complete an Exit Summary Declaration.

The European Commission has published guidelines on security declarations on export and exit provisions.

The EU’s Authorised Economic Operator (AEO) scheme allows registered companies authorised for security and safety (AEOS) to take advantage of certain facilitations of customs controls that relate to the security and safety of their goods at export. Businesses will need to have an Economic Operator Registration and Identification (EORI) number before they register for the AEO scheme.

Merchandise in Baggage (MIB)

If you take commercial goods out of the EU in your accompanied baggage, you must declare the goods electronically to CHIEF or exceptionally you may complete a paper C88/ESS.

You can have your declaration endorsed by Border Force when you leave the EU as proof of export to zero-rated goods for VAT purposes.

Regardless whether you submit a paper export declaration at an (air) port or submit an export declaration electronically to CHIEF, you must allow yourself plenty of time before your flight or voyage to clear your goods at the (air) port as extra time will be needed for Border Force to complete any examination. For more information about MIB see Notice 6.

International Road Transport

If you need to move goods through several countries, you may be able to use the Transports Internationaux Routiers (TIR) procedure to allow your goods to pass through borders with minimal customs intervention.

All traders moving goods across the EU under the TIR procedure must also submit an electronic customs declaration using the New Computerised Transit System (NCTS). Under the Union Customs Code the NCTS is being re-named to Electronic Transport System (ETS).

Temporary exports

If you want to temporarily export goods from the EU, for example samples for an exhibition, you use a temporary export Customs Procedure Code (CPC) in your declaration to NES, or move the goods under an ATA carnet.

The ATA carnet will simplify their export and temporary import into the third country destination. This type of carnet is valid in most major countries and will enable deferment of up to a year of import duties and that might otherwise have applied.

Declarations for exports by post

If you export goods out of the EU by post, you must complete and attach a CN22 customs declaration (for goods worth up to £270) or CN23 for goods of higher value. You’ll need to retain evidence of posting in order to zero-rate the goods for VAT purposes.

Moving goods through the EU to non-EU countries (indirect exports)

Indirect exports - the export of goods via an EU country or countries to a third country destination - require special procedures and paperwork. Under current legislation indirect exports are controlled by the Export Control System (ECS) which is an EU-wide system implemented in July 2009. Indirect exports (whether they are by air, sea or road) must be accompanied by an EAD which has a MRN and Barcode which can be scanned at the office of exit in the last member state before the goods exit the EU.

After the UCC has been implemented on 1 May 2016 you’ll only be required to present the MRN of the export declaration with the goods at the customs office of exit.

The UK treatment of indirect exports generally depends on their final destination:

  • if you’re exporting to a country outside the EU, you must complete an export declaration - even though the goods are initially being sent through another EU country 
  • export controls and licensing requirements will depend on the final destination of the goods
  • goods exported to a customer outside the EU can be zero-rated for VAT even if they initially travel through other EU countries - proof of the goods actual departure from the EU will be needed.

When exporting outside the EU, you must complete an export declaration, even if the goods are being sent through another EU country first. Indirect exports must be ‘Arrived’ on CHIEF before they leave the UK. ‘Arrival’ is the technical term by which goods are presented to customs via an export declaration - once you have completed this stage, CHIEF will give you permission to progress (also referred to as P2P) your shipment. Failure to comply can lead to trouble in other countries, and even the rejection and the return of your goods. Exporters must also print an EAD to travel with the goods to the office of exit until implementation of the Union Customs Code on 1 May 2016. From that date you’ll only need to present the MRN of the export declaration with the goods at the customs office of exit.’

Depending on their final destination, you may need to satisfy other regulations and obtain other export licences. Indirect exports can only be zero-rated for VAT if you can prove the goods have been exported.

In the UK the export declaration submitted electronically to CHIEF will include all the safety and security data required under the ECS. It is therefore a ‘combined’ declaration, so fiscal and ECS safety and security data are combined on the UK export declaration. In the UK you do not need to submit separate safety and security information to the ECS - CHIEF will pass the relevant data to the EU ECS system. Once your declaration has been accepted by CHIEF, a MRN will be issued. This can be used to track the movement across the EU to exit and must be ‘closed’ on the ECS system by scanning the barcode relating to the MRN at the office of exit.

The safety and security legislation that came into force in 2009 set minimum time limits for the lodgement of Export Declarations ahead of their departure times. Legislation time limits before 1 May 2016 are as follows, for:

  • ‘deep sea’ containerised cargo, at least 24 hours before the goods are loaded
  • ‘short sea’ containerised cargo, at least 2 hours before leaving the port
  • air traffic, at least 30 minutes before departure from an airport
  • rail and inland waters traffic, at least 2 hours before departure
  • road traffic, at least 1 hour before departure
  • supplies for ships and aircraft at least 15 minutes before departure

From 1 May 2016, time limits under UCC legislation are for:

  • ‘deep sea’ containerised cargo, at the latest 24 hours before the goods are loaded
  • ‘short sea’ containerised cargo, at the latest 2 hours before leaving the port
  • non-containerised cargo at the latest 2 hours before departure
  • air traffic, at the latest 30 minutes before departure from an airport
  • road and inland waters traffic, at the latest 1 hour before departure
  • rail traffic, at the latest 2 hours before departure

You’ll be covered if you supply an export declaration, you will be covered, but if you’re not declaring goods in the usual way, you must complete an Exit Summary Declaration.

Carnets for non-community goods moving through the EU

The Transports Internationaux Routiers (TIR) procedure is used to move goods, essentially by road, between 2 countries party to the TIR Convention or between 2 points in a participating country as long as the movement passes through a third country. The payment of duties and other charges are suspended. For the purposes of TIR, the Community is regarded as a single territory. TIR is only permitted in the EU when the movement either begins, ends or transits a third country.

Goods must be transported in approved vehicles or containers and be accompanied by a TIR carnet. You, or your freight forwarder, must be authorised to use the TIR system and to purchase a TIR carnet. The carnet acts as the customs declaration for movement when outside of the EU and as security for any taxes and duties to which the goods become liable.

All traders moving goods across the EU under the TIR procedure must submit an electronic customs declaration via the NCTS when the consignment reaches the frontier of the EU.

If goods originate from outside the EU, the Community Transit procedure can be used to move them within the EU.

If goods are moving to or through an EFTA country, the Common Transit procedure should be used.

Duty reliefs

Traders can claim money back for, or delay payment of various customs duties and VAT for some exports outside the EU. This page explains the types of duty relief available, as well as other relief schemes that allow traders to pay reduced or no duty if goods are exported under specific conditions.

Inward processing (IP)

Inward Processing (IP) gives exporters relief on customs duty to boost sales from the EU. On goods imported for processing and subsequent export. Customs duty and VAT is suspended and only becomes payable if the goods are entered to free circulation. You can find more information about IP in Notice 3001: special procedures for the Union Customs Code.

You need to be authorised by HMRC to use IP. Each time you enter goods for IP you’ll need to complete a Bill of Discharge.

Outward Processing Relief (OPR)

OPR may be used if you’re re-importing goods that have previously been exported from the EU for processing in a third country (a country outside the EU). It enables you to pay import duties on the value added to the goods in the third country instead of the full value of the goods. You need to be authorised by HMRC to claim OPR.

Temporary Admission relief (TA)

Subject to certain conditions, authorised traders can claim relief from customs duty, CAP charges, anti-dumping duty and countervailing duty on a range of goods temporarily imported for use in the EU, provided the goods are re-exported outside the EU in the same state.You can find more information about TA in Notice 3001: special procedures for the Union Customs Code.

Community system of duty reliefs (CSDR)

CSDR is the name for a group of reliefs that promote culture and science. You need to keep records to claim relief on a variety of goods including charity goods, museum exhibits, research equipment and trade samples.

Onward Supply Relief (OSR)

UK VAT-registered traders can import goods to ‘Onward Supply Relief’ (OSR) if they want to claim exemption from VAT on goods imported from outside the EU when the final destination for those goods is the EU (but not the member state of destination). Only the duty is payable in the importing country (UK), the VAT is accounted for in the destination country. The importer of the goods must be VAT registered.

Relief is available at initial importation on condition that the VAT is declared and paid in the member state of destination. OSR can be used at the time of import if it’s already certain that the goods are bound for another member state. The exemption from the import VAT is because the import is followed by an intra-Community supply or transfer of the goods to another member state. The VAT on the intra-Community acquisition is due in the member state of final destination.

Anyone entering goods to the OSR procedure in the UK must also meet all other conditions of OSR. You can find more information about OSR in Notice 702/7.

Preferential trade agreements

If you’re exporting to a third country, which has a preferential trade agreement in place with the EU, you need to provide your customer with proof of the origin of the products in order to support the claim to preference at the time of importation. You normally need to complete form EUR1. However, if the value of the goods is below a specified value, you can include the origin declaration on an invoice.

You can also apply to become approved to make your own preferential origin declarations on invoices for consignments of any value. Read about European Community preferences: export procedures in Notice 827.

Some countries require a Certificate of Origin showing that the goods originate in the EU in accordance with non-preferential rules of origin. Your Chamber of Commerce can issue the certificate for a fee.

Many Arab countries require exporters to supply an Arab-British Certificate of Origin with each shipment of goods. The certificate must be authorised by the Arab-British Chamber of Commerce, who work with chambers of commerce countrywide. You will need to allow sufficient time for this procedure.

Key export control documents

This is a summary of the declarations and other paperwork you’ll need to complete before your goods are exported, as well as other types of documents you may need for exports to specific countries.

Most export declarations (99.98 per cent) are now submitted electronically to CHIEF.

In exceptional cases, paper Single Administrative Document (SAD) known as a C88/ESS can be used for some exports from the UK. This should be submitted to the National Clearance Hub for manual input into CHIEF.  These declarations will take longer to process and clear than those submitted electronically to CHIEF.

ATA carnet

You can temporarily export some goods for use outside the EU using an ATA carnet. ATA carnets are issued in the UK by chambers of commerce and industry.

Form EUR1

In some countries, your goods may qualify for reduced import duty. You must provide documentary evidence of the product’s origin to claim relief. If you claim preference for EU originating goods, you need to complete form EUR1. However, if the value of the goods is below a specified amount, you can make the preference declaration on the commercial invoice. Read Notice 827 for more detail on European Community preferences.

Non-Preferential Certificate of Origin

Some countries require a certificate of origin showing that the goods come from the UK. This establishes that the goods have been wholly produced in the UK, or made in accordance with specific rules. Your chamber of commerce can issue this for a fee.

Arab-British Certificate of Origin

Many Arabic states require exporters to supply an Arab-British Certificate of Origin with each goods shipment. This must be authorised by the Arab-British Chamber of Commerce, who work with chambers of commerce countrywide. You must allow enough time for this procedure.

Health certificates for live animals, animal products and genetic materials

Exports of these goods are subject to health conditions agreed between the UK and the destination third country. Generally, the destination country sets the conditions for imports. While the Department for Environment, Food and Rural Affairs (Defra) is responsible for issuing export health certificates. Exporters must check with their customers that a particular certificate is acceptable to the authorities in the country of destination.

You should contact your local Animal Health and Veterinary Laboratories Agency office to find out if a particular animal or product can be exported to a particular destination country.

Health certificates for plants

Most third countries require plant exports to be accompanied by a phystosanitary or plant health certificate issued by your local Plant Health and Seeds Inspectorate.

Standards certification for medical devices

Medical devices should be accompanied by a Certificate of Free Sale from the Department of Health, confirming that the products meet UK and EU standards.

Licences for military, dual-use and technology products

Exports of military, dual-use and some technology goods are strictly controlled. You may need to apply for a licence, possibly even to other EU countries.

You can also check if military or dual-use goods need a licence using the ECO Goods Checker.

UK Trade and Investment offers a range of market intelligence and export support services.

Your trade association may also be able to help.

If you’re trading in a third country outside the EU and there are unrealistic or illegal trade barriers which make trading difficult in your customer’s country, you can appeal to the EU’s Complaint Register service. This is a single entry point where you can request clarification on third-country tariffs, import formalities, documentation and other measures. You can also make complaints if you think trade barriers are imposed unfairly.

Further information

HSE Chemical Regulations Directorate

0151 951 3295

UK Trade and Investment enquiry line

020 7215 8000

BIS ECO helpline

020 7215 4594

MLA Export Licensing Unit

020 7273 8265

Defra helpline

03459 33 55 77

HMRC Tariff Classification Email Advice Service

You can get non-legally binding tariff classification commodity codes advice is available by emailing HMRC’s Tariff Classification Service.

National Export System (NES) helpdesk

03000 582418

RPA helpline

0345 603 7777

RPID (in Scotland)

Contacts

Rural Priorities is delivered jointly by Forestry Commission Scotland (FCS), Rural Payments and Inspections Directorate (RPID) and Scottish Natural Heritage (SNH). If you have any questions about Rural Priorities, you can contact your local FCS, RPID or SNH office. Please select one of the following links to view the contact details:

If you’re considering options that require advice on archaeological or historic sites, that may be sought from your local authority archaeological officers.

Download guidance on trading overseas from the BIS website.

Binding Origin Information (BOI) in Notice 831.

BOI application form and guidance.