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How to Comply with VAT In the EU as a Distance Seller

Jan 12, 2021 | E-Commerce

Learning how to comply with VAT in the EU as a distance seller will help you legitimize your shop and not face any future issues. This blog will help you understand not only how to comply but about distance selling as well.

What is Distance Selling?

Distance selling is a term used for sales that are made through online platforms and not face to face.

As we are talking about distance selling in the EU, we know from the previous blogs that if you are selling in the EU, you must adhere to the VAT thresholds that are in place for each country.

Ra 14 How To Comply With Vat In The Eu As A Distance Seller
How to Comply with VAT In the EU as a Distance Seller 4

 The table below shows each country In the EU and the threshold limit.

Austria

35,000

Italy

35,000

Belgium

35,000

Latvia

35,000

Bulgaria

70,000 BGN

Lithuania

35,000

Croatia

270,000 HRK

Luxembourg

100,000

Cyprus

35,000

Malta

35,000

Czech Republic

1,140,000 CZK

Netherlands

100,000

Denmark

280,000 DKK

Poland

160,000 PLN

Estonia

35,000

Portugal

35,000

Finland

35,000

Romania

118,000 RON

France

35,000

Slovakia

35,000

Germany

100,000

Slovenia

35,000

Greece

35,000

Spain

35,000

Hungary

8,800,000 HUF

Sweden

320,000SE

Ireland

35,000

United Kingdom

70,000

We also already know that once you meet or exceed this annual threshold, you are liable to be registered for VAT in that country. It is also necessary to be VAT registered if you are storing your goods in a country’s warehousing facility.

Distance selling regulations in Europe

There are many different rules and regulations that you must abide by when selling in Europe. You must ensure that you remain compliant with these regulations when it comes to taxation and VAT, so it is essential that you are aware of what these rules entail.

The Distance Selling Regulations (DSRs) apply to all distance sales. The purpose of the DSRs is the protection of the consumer in Europe.

How To Comply With Vat
How to Comply with VAT In the EU as a Distance Seller 5

How to Comply with VAT: Rules of Distance Selling in the EU

 When you are distance selling, there is some key information you must provide to your customer:

  • Pre-Purchase information
  • Description of the product or service you are providing
  • The right to cancel orders within 7 days
  • The right to have received your order of a product or service within 30 days of purchasing
  • A refund policy
  • Non authorisation payment refund

Company Formation vs VAT Registration

Just because you are going to VAT register your business within a different country does not mean that you are forming a new company. Being VAT registered simply means that you are complying with the taxation laws of that country. To be VAT registered also allows you to recover any sales tax on your business expenditures.

Ra 16 How To Comply With Vat In The Eu As A Distance Seller
How to Comply with VAT In the EU as a Distance Seller 6

Conclusion

So to sum up, you must ensure that you have all of the correct information about the taxation laws and regulations of the specific country that you are going to be selling in.

This will provide you will all of the knowledge to become a successful distance seller. It will enable your business to grow and thrive in the EU. If you need more assistance, we are more than happy to help you! Just visit Sterlinx Global today and allow our team of experts to help you.

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