VAT Guides Industry-specific

Distance Selling and eCommerce

eCommerce is the fastest growing area of retail selling globally. If you sell goods online from your own website, or via an online market place like Amazon or eBay, it is very important that you understand the VAT obligations and liabilities of selling to customers in European and in all countries that operate a VAT or GST regime.

If you are based in the EU and sell your products directly to customers in other EU countries, or use fulfilment centres in other EU countries, you will probably face an obligation to charge and collect local VAT.  

Non-EU sellers with customers in Europe and other countries might also face an obligation to charge and collect local consumption taxes.  

The EU has created a special regime, known as Distance Selling, to simplify the administration and burden as far as possible to encourage free trade in the zone.  

If your sales exceed certain ‘VAT Registration Thresholds’ in each EU country, you will have to VAT register in those countries.  Each EU state has created a revenue threshold (usually €35,000 per annum) – once the retailer crosses this sales threshold, they are legally obliged to register as a non-resident VAT trader in the country.  

Removing the burden of import VAT from the customer will result in an enhanced buying experience which will positively impact your reputation in the long term. The VAT registration has no net impact on your sales prices since the import duty costs are no longer passed onto the customer.

Related articles

Selling on Amazon - Fulfilment options explained

There are 4 distinct ways to sell your products on Amazon, each with a different VAT compliance implication. Here we explain each option and the issues for sellers to consider

Read more
Introduction of a VAT system in the Gulf region

The GCC countries will implement VAT,starting in 2018

Read more
Amazon Export FBA vs. Pan-European - VAT Implications

If you sell your products via Amazon, the fulfillment service you decide to use will impact your VAT obligations.

Read more