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 Europe and in all countries that operate a VAT or GST regime.
If you sell your products directly to customers in other EU countries, or use fulfillment centres in other EU countries such as Amazon FBA, you will probably face an obligation to charge and collect local VAT. 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.
Foreign businesses selling goods to consumers in European countries most likely will face an obligation to charge and collect local sales taxes. If you are exporting your goods to Europe for direct sale, distribution or sale via Amazon - you will need to register for the VAT tax in at least one European country
Once your goods are in Europe, there are revenue thresholds which must be monitored that will govern your tax obligations in other countries. It is vital that you understand these rules prior to setting up your website or marketplace to ensure compliance with European Union tax law.
Filing of statistical reports (Intrastat declarations)
Guidance on development, catalogue VAT rates and logistics
Distance sales analysis and monitoring
Set up on online submissions portals
Managing all correspondence with the tax authorities
VATGlobal also has expertise in the following areas, which are all relevant for eCommerce traders to understand:
The use of EU fulfilment centres
Selling goods via your own website vs. using an online market place (Amazon, eBay, Alibaba etc.)
Website price format & exchange rates