Shipping goods from non-European Union (EU) countries to Germany under the DDP Incoterm® involves navigating complex customs and tax regulations. With the German Customs and Tax Authorities increasing their enforcement of these requirements, this article aims to guide you on how DHL Express Commerce can support compliant shipping to Germany.

What Are Incoterms®?

Incoterms®, or International Commercial Terms, are standardized commercial terms set by the International Chamber of Commerce (ICC). These terms are agreed upon by the supplier/seller and buyer of goods to clearly define responsibilities during international trade.

Delivered Duty Paid (DDP)

DDP is one of the Incoterms® where the supplier/seller takes on the responsibility for import customs clearance and the payment of duties and taxes.

Key Requirements for Non-EU Suppliers/Sellers when shipping to Germany using the DDP Incoterm®

• Mandatory Tax Registration: Suppliers must register for VAT purposes in Germany.
• VAT Returns: Monthly and annual VAT returns must be filed with the German Tax Authorities.
• Record Keeping: Compliance with local record-keeping requirements, generally a 10-year period in Germany.

Note: The Import One Stop Shop (IOSS) scheme applies only to B2C shipments valued at EUR 150 or less. Even if you are using the IOSS scheme, tax registration in Germany will still be required for any shipments that fall outside the scope of this scheme.

DHL Express Billing Services

DHL Express offers door-to-door transportation services and various Duties & Taxes Billing Services independent of the Incoterms® indicated on the commercial invoice.

One such service is the Duty Tax Paid (DTP) Billing Service, available independently from the Incoterm® indicated on the Commercial Invoice. DHL pays applicable import duties and taxes to local customs authorities and then invoices the shipper's account. This ensures that the receiver is not approached for payment upon delivery, creating a positive customer experience.

Impact on Suppliers/Sellers and Receivers

Suppliers/Sellers (from Rest of World to Germany):

• Understand and comply with German regulatory requirements, possibly seeking legal/tax advice.
• Consider alternative Incoterms® like DAP (Delivered at Place) to avoid the need for German VAT registration.

Receivers (in Germany):

• Be aware that once the shipper requests DHL to bill import duties and taxes to a specific account, the receiver will not be charged upon delivery.
• DHL may contact receivers for necessary information or clarification to clear shipments, regardless of the Incoterm® used.

How can DHL Express Commerce support my shipping requirements?

Selecting the Duty Tax Paid (DTP) billing service

Here are three ways a user can choose the Duty Tax Paid (DTP) billing service in DHL Express Commerce:

1. Manually select the Duties & Taxes Paid checkbox when creating a shipment.
   
2. Set up a rule to automatically select the Duties & Taxes Paid service when specific conditions are met (Settings > Rules).
   
3. Set the Duties & Taxes Paid option to be on by default for every shipment (Settings > Couriers > DHL Express Settings > Advanced).
   

Setting an Incoterm®

Below are three ways a user can set an Incoterm® in DHL Express Commerce:

1. Manually select the Incoterm® when creating a shipment under Customs Details > Incoterms
   
2. Set up a rule to automatically select the Incoterm® when specific conditions are met (Settings > Rules).
   
3. Default an Incoterm® in Settings > Couriers > DHL Express Settings > Advanced.
   

Billing Duties & Taxes to a Separate Account

If required, Duties and Taxes can be billed to an alternative account number rather than the shipper's account number. There are three ways to achieve this:

1. Open the order and enter the account number to be billed under Customs Details > Duty Account#.
   
2. Default a Duties & Taxes account number in Settings > Couriers > DHL Express Settings > Advanced.
   
3. Add a Duties & Taxes account number against any Additional Customs Party setup in Settings > Options.
   

Providing a Registration Tax ID 

If Delivered Duty Paid (DDP) is to be used, users can configure the relevant tax ID to be populated when shipping to Germany. For further information, see our article on Registration and Tax Number Settings.