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Selling Cross-Border

If you are an online seller selling to customers based in other countries, the chances are that you should be charging VAT or the equivalent sales tax of the customers country.

There are many different variants of how you might be selling to customers abroad - either direct shipping, through marketplaces, fulfillment by Amazon (FBA), third party warehouses etc. There are a few key things that you need to be aware of to make sure that you are VAT compliant in other EU countries.

Your Checklist

• You should know where you are shipping product from and where you are shipping to for all your sales.
• Do you know if you have you exceeded any distance selling thresholds?
• What VAT rates are you charging on your sales, have you set up to charge the correct VAT rate based on the location of the customer?
• Are you VAT registered in other countries and are you submitting returns to those countries?
• If you are using third party picking, packing and shipping such as FBA, know where they are holding your stock and shipping it to.

Do you know the answers to the above questions? If the answer is no, then why not let us help you, so that you can concentrate on selling...

Putting into practice the EU Single Market

The Member States, as part of the implementation of the Single Market in the EU, agreed to various simplifying measures. Very crucially, all duties and taxes on goods imported / exported between European Union countries were removed. So from a VAT perspective, these are not classified as imports and exports, but as ‘Intra-community Acquisitions’ and ‘Intra-community Dispatches’.

There is very precise legislation which governs these intra-EU sales and purchases, and even the movement of a company’s own goods between the EU Member States. Generally, reverse charge rules should be applied and there is less administration involved in ‘Acquisitions’ and ‘Dispatches’ to and from other EU Member States, compared with countries in the rest of the world.

Due to this, additional reporting requirements are therefore essential (for example EC Sales Listings and Intrastat declarations), but the liability and difficulty of VAT is considerably reduced.