What do I need to do to charge the correct VAT rate?


Last Update 2 年前

If you're looking for a service to help you understand your VAT obligations, check out VATGlobal and SimplyVAT.

Depending on where you're located and your volume of sales, you should do the following:

  • If you're based in the EU and have reached your country's sales threshold- You may be liable to register as a VAT collecting entity. For example, if you sell to Germany threshold for it is 12500 EU. If you are registered in Europe you should inquire with your local tax office. If you are based outside Europe, please see the information below.
  • If you're based in the EU and haven't reached the sales threshold for your country- You're not obligated to register as a VAT payer, although you can register if you like and submit us your VAT. If you don't register as a VAT payer, we will still charge every order with VAT that is fulfilled to EU member state, this is a legal requirement. Please make sure you adjust your pricing as you will need to account for additional tax costs.
  • If you're not based in the EU and sell your products to customers in the EU- You may need to register as a VAT payer if you already have or planning to have customers in Europe. Please note VAT is paid by the end consumer, so you should be able to claim it, please discuss this with your tax authority. It's up to you to decide in which country to register. Once you do, please submit your VAT code and we'll charge 0% VAT to orders going to EU member states that are fulfilled by us. If you're not registered and don't submit a VAT ID, we will charge VAT for orders going to EU member states.

Once you are a registered VAT payer pay attention to the following:

  • Check VAT reporting and invoicing procedures at your registered TAX and seek out tax advice for local licensed accountants if there is some unclear.
  • Collect VAT on orders going to EU member states.
  • File VAT returns and submit them to your country's tax authorities (deducting VAT incurred on your supply chain).

Make sure your customers see VAT charges during checkout as a separate line. If you are using Shopify this feature is built in and you can read more here.

You also need to pay attention to the “remote selling” (outside EU) threshold, which from July 1, 2021, is 10 000 euros. if you exceeded those sales in the fiscal year, you will need to register as a VAT payer in the Union scheme (OSS) or in the specific member state.

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