7 Important EU Vat Tips
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The EU Vat Rules Differ For Every Country
Even though the EU is viewed as a “single” market, every country inside the EU is held responsible for the way it collects VAT.
What this ultimately means is there are twenty-eight counties that are using different EU VAT product rates and rates along with the ways that they collect EU VAT as well as frequency of reporting and filing differently.
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Amazon Can Assist You To Sell In The EU
Amazon already occupies five-marketplaces within the EU, along with 31 Fulfillment Centers spread across seven of these countries.
This provides them with accessibility to a €500 billion market that grows by 12% year-on-year. There are also 5 primary programs that Amazon offers to initiate your European domination.
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You Are Required To Pay EU Vat On All Of Your Inventory Upfront
VAT is charged on the 1st entry point when your goods exceed the low-value consignment thresholds of around $20 according to VATGlobal. You will need to make a decision on who will be liable for import charges, whether it will be your customers or you.
If you have in the past exported from the US and you have not yet experienced these charges, it is likely that the customers are known as “importer of record.” This is not a good thing as it will mean that your customers are required to pay any of the EU duties or VAT before the goods can be delivered.
However, when you voluntarily register for VAT, it will make you the retailer the “importer of record”. This will mean that the goods are sent with all the duties paid already without impacting the end customers.
Costs involved in EU VAT compliance in becoming the “importer of record” will far outweigh the drop-in numbers associated with returns or losing repeat business from irritated customers.
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You Will Need An EORI Number When Exporting To Europe
The EORI number which stands for Economic Operator Registration and Identification is the unique number that is used across the European community that identifies the importers to the EU custom authorities.
The number is required on all your import documentation that identifies you as an importer.
You can find out more about how to get an EORI here.
- Any Inventory That Is Stored In The EU Has To Be VAT Registered
Holding stock in any of the EU countries will trigger an obligation automatically to become VAT registered. If you use EFN service with Amazon in one of the EU countries like the UK, you will only need one VAT registration where the stock is stored.
If your stock is held in various locations, you need to be registered for VAT in every country. It is the PAN EU FBA program that requires this registration in every country.
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You Will Require Legal Representation In Some Of The Countries
When it comes to the non-EU companies, you might be obligated to obtain fiscal representation when you VAT register in specific countries that include Poland, Italy and France.
The fiscal representatives are held jointly eligible for the VAT that is owed. If you are a non-EU company, you may need increased fees or bank guarantees.
The establishment of a company within the EU is a better option in order to avoid these issues. For example, in the UK where the EU-to-EU rules apply.
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The Marketplaces Will Not Take Any Of The Responsibility For Your EU VAT
The marketplaces will not take any of the responsibilities when it comes to collecting taxes from customers, and the European governments are becoming stricter to make sure these taxes have been collected.
The tax authorities in the EU are pursuing the retailers actively since discovering that the undeclared VAT ended up costing the EU €193 billion in 2011 associated with lost revenue.
After allowing for the marketplaces to become liable if the VAT has not bee collected, when you do not pay your taxes can result in Amazon closing your store down in 30 days. Making sure you keep up with these payments can really save you on serious issues into the future.